Iran War Fears Send Oil Prices Surging as U.S. Weighs Ground Troop Deployment

Oil prices climbed sharply on Friday despite a volatile trading session, as alarming reports of potential U.S. ground troop deployment into Iran rattled energy markets already under significant stress. Brent crude futures rose 3.6% to $112.52 per barrel, while West Texas Intermediate (WTI) gained 3% to reach $98.38 per barrel.

Markets had initially softened following signals from U.S. officials that Washington might lift sanctions on Iranian oil currently at sea, a move that could release roughly 140 million barrels of supply and ease price pressures. Optimism around potential Middle East de-escalation also briefly weighed on crude. However, sentiment reversed sharply after Reuters confirmed the deployment of additional U.S. Marines and sailors to the region, followed by a CBS News report detailing Pentagon plans for a ground force operation inside Iran.

Brent is now up nearly 50% since U.S.-Israel military operations against Iran began in late February, when the global benchmark was trading near $70 per barrel. For the week, Brent posted gains of 8.6%, with WTI up 1.3%. Saudi Arabian officials have warned that prices could spike to $180 per barrel if the conflict extends past April, a scenario that threatens global economic growth and demand destruction.

The ongoing crisis intensified after Israel struck South Pars, the world's largest natural gas field shared by Iran and Qatar, triggering retaliatory attacks across multiple Middle Eastern energy sites. Iran's continued blockade of the Strait of Hormuz is further disrupting oil and gas exports, particularly to Asia.

Major central banks including the Federal Reserve, the European Central Bank, and the Bank of England remain cautious, with markets now pricing in a 50% chance of a rate hike by October as surging energy costs threaten inflation targets and broader economic stability.