By: Economy Middle East

Oil prices advanced on Friday as intensifying attacks by the United States and Iran across the Gulf deepened concerns about energy supplies through the Strait of Hormuz and raised the possibility of disruption to the Red Sea export route.

Brent crude futures rose 0.81 percent to $84.91 per barrel at 9:28 UAE time. U.S. West Texas Intermediate crude futures gained 0.87 percent to $79.68 per barrel, erasing their losses from the previous session.

Both benchmark contracts have climbed nearly 12 percent this week. Brent was on course for a third consecutive weekly gain, while WTI was heading for its second straight weekly increase.

The renewed advance came as the broken truce between Washington and Tehran continued to constrain oil flows through the Strait of Hormuz. Market concerns intensified after Tehran asked the Houthi political and military organization to prepare for a possible shutdown of the Red Sea export route.

Attacks intensify again

For the first time since a memorandum of understanding paused the fighting last month, the United States launched two major waves of airstrikes in a single day on Wednesday. Most of the attacks targeted locations near Iran’s southern coast, and U.S. forces continued striking targets on Thursday.

The U.S. Central Command said its forces completed another major wave of strikes against Iran, targeting coastal surveillance and air defense sites, military logistics infrastructure and maritime capabilities.

CENTCOM said the operation marked the sixth consecutive night of U.S. strikes against Iran and involved fighter aircraft, drones and warships using precision munitions against dozens of military targets.

Meanwhile, Qatar’s Ministry of Defense said the country’s armed forces thwarted an Iranian missile attack early on Friday. The Interior Ministry reported that a child was injured by shrapnel produced during the interception operations.

Iran has responded to the U.S. campaign with missiles and drones directed at American military facilities in neighboring countries. The attacks included a barrage targeting a recently expanded air base in Jordan.

Energy security concerns

International Energy Agency Executive Director Fatih Birol warned that the continued disruption presented a serious threat to energy security.

“Oil security is still a critical issue,” Birol said on Thursday during an event hosted by the Council on Foreign Relations in Washington.

“We should be worried, and I am worried, if the situation does not improve in the next few weeks,” he added.

The latest escalation has restored a geopolitical risk premium to crude prices as traders assess whether attacks could further restrict exports from Gulf producers or disrupt alternative shipping routes.

The Strait of Hormuz remains central to those concerns because it is the principal maritime outlet for several of the world’s largest oil and gas exporters. Any additional reduction in tanker traffic could tighten physical supplies and increase freight, insurance and security costs.

The possibility of disruption around Yemen would widen the threat beyond the Gulf. Tankers traveling between Middle Eastern producers and European markets frequently use the Bab el-Mandeb Strait, the Red Sea and the Suez Canal, making that corridor an important alternative to longer voyages around Africa.

Hormuz remains critical

The IEA estimates that approximately 20 million barrels per day of crude oil and petroleum products passed through the Strait of Hormuz in 2025. That represented around 25 percent of global seaborne oil trade, with about 80 percent of those shipments destined for Asia.

Nearly 15 million barrels per day of crude oil, equivalent to approximately 34 percent of global crude trade, crossed the waterway during the year. China and India together received 44 percent of those crude exports, illustrating why prolonged restrictions could have particularly significant consequences for Asian importers.

The IEA says alternative export capacity is limited to an estimated 3.5 million to 5.5 million barrels per day. Saudi Arabia can redirect some production through its East-West pipeline to the Red Sea port of Yanbu, while the UAE can use its pipeline from Habshan to Fujairah.

However, those routes cannot replace all the oil normally transported through Hormuz. Iran, Iraq, Kuwait, Qatar and Bahrain rely on the strait for the majority of their oil exports, increasing their exposure to any sustained interruption.

Historic supply disruption

The impact of the conflict has already extended well beyond delayed tanker movements. The IEA said flows through Hormuz fell from around 20 million barrels per day before the war to an average of only 2.7 million barrels per day during March, April and May.

According to the agency’s June assessment, cumulative supply losses from Middle Eastern producers had exceeded 1.3 billion barrels. The disruption affected crude oil, liquefied petroleum gas, petrochemical feedstocks, diesel and jet fuel.

Saudi Arabia responded by increasing crude shipments through its East-West pipeline. Exports from Yanbu rose from approximately 2 million barrels per day before the conflict to more than 5 million barrels per day in early June, while the Kingdom also drew on oil stored overseas.

The IEA’s 32 member countries agreed in March to make 400 million barrels from emergency reserves available to the market. It was the largest coordinated oil stock release in the agency’s history.

Red Sea risks

A closure or severe disruption of the Red Sea route would place further pressure on exporters already using alternative channels to avoid Hormuz. It could also force more tankers to sail around the Cape of Good Hope, increasing journey times, fuel consumption and freight costs.

The U.S. Energy Information Administration reported that Red Sea oil flows through the Bab el-Mandeb Strait averaged 4 million barrels per day during the first eight months of 2024, down from 8.7 million barrels per day in 2023 as security concerns redirected shipping.

Oil moving around the Cape of Good Hope consequently increased to 9.2 million barrels per day during the same period, compared with 6 million barrels per day in 2023.

The threat to both Hormuz and the Red Sea means traders are monitoring military developments alongside tanker movements, export volumes and emergency stock releases. The direction of prices will depend heavily on whether the fighting eases or produces further disruption across two of the world’s most important energy corridors.