Oil prices jumped more than 3% on Friday, extending strong weekly gains as escalating Middle East tensions and uncertainty surrounding a U.S.-Russia diesel supply agreement heightened concerns over global energy markets.
At 15:31 ET (19:31 GMT), December Brent crude futures climbed 3.4% to $109.48 per barrel, while November West Texas Intermediate (WTI) crude futures rose 3.3% to $101.17. Brent gained 4.5% for the week, while WTI surged 10.1%.
The oil price rally followed renewed fears of supply disruptions in the Strait of Hormuz, a critical shipping route for global crude exports. Although Middle Eastern oil shipments have largely recovered to pre-war levels, intensified Iranian attacks on commercial vessels have raised concerns about maritime security.
Meanwhile, escalating clashes between Iran-backed Houthi forces and Yemen's Saudi-supported government have increased risks to shipping through the Bab el-Mandeb Strait.
Houthi attacks on Saudi energy facilities and airports further unsettled markets, including strikes that killed 13 people at King Khalid International Airport last weekend.
Traders also monitored reports that Washington could ease sanctions on shadow fleet tankers transporting Russian, Iranian and Venezuelan oil. However, shipping analytics firm Kpler warned that only 24 of approximately 160 sanctioned very large crude carriers might realistically return to mainstream operations.
Separately, President Donald Trump's diesel supply agreement with Russian President Vladimir Putin has generated political controversy amid continued uncertainty surrounding Russia's export capacity.
Ukrainian President Volodymyr Zelenskyy criticized the arrangement, arguing that additional Russian energy revenue could finance Moscow's war. Meanwhile, 18 U.S. lawmakers introduced legislation seeking to block the agreement.
Macquarie energy strategist Walt Chancellor said Russia could potentially prioritize additional diesel shipments, although sustained export growth would depend on refinery restarts and seasonal domestic demand.
The International Energy Agency also announced plans to release more than 20 million barrels of diesel while accelerating previously pledged emergency oil reserve distributions.
Despite these measures, the IEA warned that global diesel supplies could remain constrained into 2027, even as worldwide oil demand is expected to decline this year.
With geopolitical tensions threatening major shipping routes, oil markets remain vulnerable to further price volatility despite efforts to stabilize global fuel supplies.
