Oil prices surged Friday as conflict in the Gulf intensified and Donald Trump demanded Iran’s unconditional surrender, rattling global markets.
Energy traders reacted swiftly as attacks on Iraqi oil fields and escalating hostilities disrupted key supply routes across the Middle East.
The international benchmark Brent North Sea Crude jumped more than six percent, briefly touching $91.89 per barrel.
The U.S. benchmark West Texas Intermediate crude surged over eleven percent, climbing above the psychologically critical $90 level.
The spike came as maritime traffic through the Strait of Hormuz slowed sharply amid fears of attacks on commercial vessels.
Roughly one fifth of the world’s crude oil and liquefied natural gas flows through the narrow waterway.
Markets had initially hoped the confrontation would be brief, but Washington’s hardline rhetoric raised fears of a prolonged regional conflict.
Research director Kathleen Brooks at XTB said Trump’s comments dashed hopes the crisis might quickly subside.
Oil prices have climbed dramatically this week, with Brent rising more than a quarter and WTI surging nearly one third.
Brooks warned the surge could prove disastrous for the global economy if high energy costs persist.
Sustained increases in fuel prices threaten to reignite inflation while limiting central banks’ ability to lower borrowing costs.
Investment director Russ Mould of AJ Bell said prolonged disruption to shipping routes could deepen inflationary pressure worldwide.
Meanwhile, attacks were reported on oil facilities in southern Iraq and in the autonomous Kurdistan Region.
One U.S.-operated oil field halted production following security threats near the facilities, officials said.
The United States Navy is preparing to escort commercial ships through the Strait of Hormuz if conditions allow.
Iranian state television also reported a drone strike on a vessel in the strait that sparked a fire.
Financial markets were further shaken after the U.S. Department of Labor reported an unexpected loss of 92,000 jobs in February.
The weak data clouded the outlook for the Federal Reserve, which may delay interest rate cuts amid surging oil prices and war uncertainty.
Wall Street’s major indices fell around one percent, while Europe’s leading markets closed with similar losses.