Oil Prices Set for Biggest Weekly Surge Since April as Iran War Escalates

Crude oil markets are on course for their sharpest weekly gain since April, with prices climbing roughly 12% as renewed hostilities between the United States and Iran disrupted flows through the Strait of Hormuz and rekindled fears over Middle Eastern supply.

During Asian trading on Friday, both major benchmarks advanced by about 1%. Brent Crude was quoted around $85.06 a barrel, while West Texas Intermediate rose 1.2% to near $79.88. Earlier in the week Brent had breached $86 as tensions deepened.

The escalation followed a sequence of confrontations at sea. Iran was reported to have struck two UAE-managed supertankers transiting the southern lane of the Strait of Hormuz near Oman, in a corridor widely regarded as being under US control. In response, US forces launched strikes on Iran for six consecutive nights and reinstated a naval blockade in the Gulf of Oman intended to cut Tehran's oil exports.

According to US Central Command, the latest operations targeted dozens of Iranian military sites, including coastal surveillance installations, air defence positions, logistics infrastructure and maritime assets. US forces also disabled a sanctioned Iran-linked tanker near the key Kharg Island export terminal, signalling a widening of the blockade deep into the Persian Gulf.

The near-collapse of the earlier ceasefire has curbed traffic through the Strait of Hormuz, tightening Middle Eastern supply once more. Adding to the concern, Iran-aligned Houthi forces in Yemen are reportedly awaiting instructions from Iran's Islamic Revolutionary Guard Corps to close the Bab el-Mandeb Strait, which would further threaten exports through the Red Sea.

For Malaysian and Southeast Asian maritime and oil and gas operators, the developments carry direct commercial and operational weight. The bulk of the region's crude and LNG imports pass through the Strait of Hormuz, so sustained disruption raises freight costs, insurance premiums and cargo uncertainty for shipowners and charterers. Asian LNG spot prices have already jumped in response. Elevated crude prices may buoy upstream revenues for regional producers, but downstream players, bunker suppliers and shipping firms face higher input costs and rerouting risks. With two critical chokepoints now under threat, contingency planning around alternative supply routes becomes increasingly pressing for regional trade.