West Texas Intermediate (WTI) crude oil prices jumped over 10%, trading near $103.80 per barrel during Asian hours on Friday, following two days of losses. The surge was triggered by heightened supply risk concerns stemming from escalating tensions in the Persian Gulf, particularly after US President Donald Trump issued strong threats against Iran and warned of intensified military action over the next two to three weeks. Trump also referenced the destruction of a bridge in Tehran, signaling further escalation and urging Iran to reach a deal before it is too late [1].
Iran’s Foreign Minister Abbas Araghchi responded by stating that recent US strikes on civilian infrastructure would not force Iran to retreat, describing them as evidence of an opponent in disarray and moral decline [1]. Oil prices briefly eased after reports emerged that Iran and Oman are working on a protocol to monitor transit through the Strait of Hormuz, but optimism faded quickly. Iranian official Kazem Gharibabadi emphasized that tanker movements through the vital route should be supervised and coordinated by both countries [1].
Meanwhile, the United Kingdom is hosting discussions with multiple countries to secure passage through the Strait of Hormuz, and OPEC+ is considering a potential output increase. However, any additional supply is unlikely to affect markets in the near term, given the immediate geopolitical risks [1].
The market reaction underscores the sensitivity of oil prices to geopolitical developments and supply disruptions, especially in the Persian Gulf region. The ongoing uncertainty and threats of military escalation have led traders to reassess the scale of supply risks, driving the sharp price increase [1].
CONCLUSION
WTI oil prices surged sharply on renewed supply concerns and escalating geopolitical tensions between the US and Iran. Despite brief optimism over potential transit monitoring protocols, the market remains highly sensitive to developments in the Persian Gulf. Near-term supply increases from OPEC+ are unlikely to offset the immediate risks, keeping oil prices elevated.