Global crude oil prices climbed sharply this week, with Brent crude crossing the $100 per barrel mark on Thursday and touching $101.31 per barrel on Friday morning before easing below $100 later in the day. The rally has been driven by mounting supply concerns as the Strait of Hormuz remains largely paralysed, Houthi attacks continue in the Bab el-Mandeb Strait, and Kazakhstan has halted oil exports through a major pipeline following Ukrainian drone strikes.
At the time of writing, Brent crude was trading at around $98 per barrel, while West Texas Intermediate (WTI) stood at $90 per barrel, with both benchmarks gaining more than $10 per barrel since Monday.
The latest surge comes amid growing fears that the conflict in the Middle East is widening into a broader regional confrontation. Iran has expanded its military actions by launching fresh attacks on U.S. allies across the region. Iranian drones reportedly struck parts of Kuwait, while the Islamic Revolutionary Guard Corps (IRGC) threatened British military bases after the United Kingdom allowed the United States to launch B-1 bomber missions from its territory.
The escalation follows attacks by Iran-backed Houthi rebels on two Saudi oil tankers in the Red Sea, prompting several commercial vessels to alter their routes and reinforcing concerns over the security of global energy supplies. The Houthis have declared a naval blockade on Saudi Arabia and threatened to target tankers linked to the kingdom, which exports 4-5 million barrels of crude daily through its Yanbu terminal on the Red Sea.
With no visible signs of de-escalation, commodity analysts expect oil prices to remain on an upward trajectory in the near term. The market has also been supported by disruptions outside the Middle East. Kazakhstan suspended oil flows through the Caspian Pipeline Consortium (CPC) system after Ukrainian drone attacks, adding another source of supply uncertainty.
U.S. President Donald Trump further escalated the rhetoric by announcing a new punitive measure against Iran. He said that any future damage to ships, cargoes or related goods would be compensated using Iranian funds under U.S. control, adding that the amount "may be very large, but it is the fair and right thing to do." Earlier, Trump had warned that the United States would hold Iran directly responsible for any future Houthi attacks and threatened "major military punishment" if such attacks continued.
Iran has responded with its own warning, saying that if its security is threatened, no country's oil exports in the region would remain safe. With key maritime chokepoints under pressure and diplomatic efforts showing little progress, analysts believe crude prices could remain elevated, increasing inflationary risks for oil-importing economies, including India.