Oil prices surged to their highest levels since April amid growing concerns over escalating hostilities in the Middle East, particularly involving Iran. Brent crude, the international benchmark, climbed above $117 a barrel on Thursday, marking an increase of nearly 4 percent during afternoon trading in New York. This rise brought Brent's gain to more than 10 percent for the month and followed a similar upward trend in U.S. West Texas Intermediate (WTI) crude, which exceeded $103 per barrel.
The price increases reflect market anxiety over the potential for intensified military conflict between the United States, Israel, and Iran ahead of the U.S. midterm elections next month. Analysts noted that the ongoing war in Iran, which began after U.S. and Israeli airstrikes on Feb. 28, coupled with recent attacks on oil tankers and infrastructure, have heightened fears of further disruptions to global oil supplies.
Iran has intensified actions against vessels navigating the Strait of Hormuz, a critical maritime chokepoint through which about one-fifth of the world's oil is shipped. Iran's state media reported that seven oil tankers were either targeted by attacks or damaged by naval mines in recent days. Separately, the Iran-backed Houthi militia attacked an airport in Saudi Arabia this week, killing two people, prompting the U.S. to withdraw some diplomatic personnel from the kingdom over security concerns.
Despite a partial recovery in crude shipments from Gulf producers excluding Iran, which reportedly exported more oil last week than the prewar average, tanker tracking data indicates that overall flows remain below normal levels. Experts warn that the risk of strikes damaging key production, processing, or export facilities could severely restrict supply, driving prices higher.
Market strategists suggest that if the conflict escalates dramatically, with major damage to oil infrastructure, prices for crude could surge toward $150 per barrel. Diesel prices have already reached around $200 per barrel, and some analysts predict they may climb to $250 or beyond if fighting intensifies.
U.S. President Donald Trump reiterated comments suggesting the conflict could end swiftly but stressed continued efforts to restrict Iranian oil exports. Meanwhile, the U.S. ambassador to the United Nations cautioned that the standoff with Iran could persist for months or longer.
The rise in oil prices has had tangible effects on consumers, with the average U.S. gasoline price hitting $4.29 per gallon Friday, approaching May’s peak of $4.55. Diesel prices have remained near their September highs as well. The spike in energy costs coincided with a downturn in U.S. equity markets, where the S&P 500 lost 0.5 percent amid broader investor uncertainty.
Futures contracts indicate that Brent crude prices are expected to remain elevated above $100 per barrel through at least April 2027, reflecting a sustained expectation of prolonged market disruption. Reports also note that the U.S. and Israeli militaries have developed contingency plans for potential military action against Iran following the midterm elections, adding to market nervousness about the near-term outlook for the region's stability and global energy supplies.