Oil surges 12% this week as Hormuz shipping stalls under US strikes
Crude prices are poised for their largest weekly gain since April as US military strikes on Iran force a sharp reduction in tanker traffic through the Strait of Hormuz, pushing the Brent curve into deep backwardation.
Brent crude rose 1 percent to $85.06 per barrel on Friday, while West Texas Intermediate climbed 1.2 percent to $79.88, putting both benchmarks on track for a 12 percent weekly advance. The surge marks the strongest weekly performance since April and reverses recent losses as physical supply risks materialize in the Middle East.
The price jump follows six consecutive nights of US military strikes on Iranian targets, including coastal surveillance systems, air defence positions, and maritime infrastructure. Washington has also reinstated a naval blockade in the Gulf of Oman to restrict Iranian exports and disabled a sanctioned, Iran-linked tanker near Kharg Island. Analysts view the targeting of the tanker as a sign that US enforcement is expanding beyond the Strait of Hormuz itself.
These military actions have halted a fragile recovery in shipping through the Strait of Hormuz, which handles roughly 20 percent of global oil consumption. The escalation follows attacks on two UAE-managed oil supertankers near Oman. Vessel operators are now actively reassessing routing risks and insurers have increased their scrutiny of voyages, sharply slowing traffic through the waterway.
“At the Commander in Chief’s direction, CENTCOM is further degrading Iranian military capabilities and holding Iran accountable for recent attacks on commercial shipping,” the US military said in a statement. As diplomatic efforts collapse, analysts note the conflict is adding a significant geopolitical premium to crude markets.
This premium is visible in market structure. The Brent futures curve moved sharply into backwardation earlier this week, with prompt contracts trading at a sizeable premium to longer-dated deliveries. This structural shift signals that traders are pricing in immediate, near-term supply tightness rather than a long-term deficit.
Risk of wider disruption
Market attention is now shifting to the potential for the crisis to cascade into the Bab el-Mandeb Strait. This route linking the Red Sea to the Gulf of Aden has become an increasingly vital alternative for Saudi crude exports. Reports indicate Iran-aligned Houthi forces in Yemen are awaiting instructions from the Islamic Revolutionary Guard Corps regarding possible disruptions there. Simultaneous blockages at both maritime chokepoints would severely tighten global oil trade flows.
The sustained rally above $85 per barrel presents a mixed macroeconomic picture. For exporters such as Nigeria, the pricing provides a critical windfall, supporting government revenues and foreign exchange inflows well above the 2026 budget benchmark of $64.85. However, if the Hormuz stalemate persists, higher crude costs will translate to increased fuel and transportation expenses, stoking inflationary pressures across major importing economies.
