Oil prices surge as US-Iran tensions fuel supply fears

Global oil prices climbed on Friday, putting crude on track for its strongest weekly rise since mid-July as renewed US-Iran clashes raised fears of further disruption to Middle East energy supplies.

Brent crude gained 54 cents, or 0.6%, to $96.06 a barrel, while US West Texas Intermediate rose 80 cents, or 0.9%, to $92.10.

For the week, Brent was up 7.6%, while WTI advanced 10.4%, marking their biggest weekly increases since the week ending July 20.

The latest escalation has intensified concerns over the security of oil shipments, particularly through the Strait of Hormuz, a critical route for global energy trade.

Israeli Defence Minister Israel Katz has also warned that Israel could target Iranian military and civilian infrastructure, including energy facilities, adding to market uncertainty.

Analysts at ANZ raised their near-term Brent forecast to $95 a barrel, while warning that prices could climb further if the regional conflict worsens.

The market has so far benefited from elevated oil inventories, which have helped cushion the initial supply shock. However, analysts cautioned that these reserves could provide less protection if disruptions continue and available buffers shrink.

US Vice President JD Vance said Washington would not enter talks with Iran unless Tehran stops targeting commercial shipping in the Strait of Hormuz.

Meanwhile, Iran has expanded the list of vessels it considers non-compliant, warning that ships attempting to pass through the strait could face fines, confiscation or detention. Iraqi vessels remain among the limited number of ships allowed to transit.

Iraq has also increased its crude exports, reaching around 2.34 million barrels per day in August, up from approximately 1.35 million bpd in July. Further growth is expected in September as discounts and Iranian approvals for Iraqi tankers attract additional buyers.