Oil Prices Surge Amid Strait of Hormuz Tensions and US Stockpile Decline
New York oil prices rose more than USD 1 on Friday and are on track for their highest one-month gain since March. Brent futures increased by USD 1.01, or 1.1 percent, to USD 90.04 a barrel at 1:26 p.m. ET (1726 GMT), while US West Texas Intermediate crude rose USD 1.28, or 1.5 percent, to USD 84.87 a barrel.
The price increase was driven by reports of tankers being forced to turn around in the Strait of Hormuz, which has sharply reduced traffic through the waterway. The Iran war that began on February 28 has disrupted Middle East output, running into millions of barrels a day. Houthi militia forces in Yemen have also disrupted shipping through the Bab el-Mandeb Strait.
US crude stockpiles fell to their lowest levels since 2018, according to data from the US Energy Information Administration (EIA). Research firm Gelber & Associates noted that 'Fresh US strikes on Iranian military targets keep the geopolitical risk premium firmly in place near chokepoints like the Strait of Hormuz.'
Oil prices are expected to rise further this year, with Brent crude estimated to average USD 85.22 a barrel in 2026, up from June's forecast of USD 84.50.