Oil Prices Surge on Middle East Tensions, U.S. Diesel Hits Record
Oil prices are poised to close the week above $100 for the first time since mid-May, as tensions in the Middle East escalate. Brent crude futures rose by 81 cents to $108.44 a barrel, while U.S. West Texas Intermediate crude increased by 69 cents to $103.17 a barrel.
The rise is attributed to attacks along key shipping routes, particularly the Strait of Hormuz, which has intensified in recent days. Iran-aligned Houthis seized control of Yemen's port of Mocha on Thursday, posing an additional threat to Red Sea traffic. Analysts warn that while volumes are still moving through the strait, they remain well below pre-war levels.
The U.S. national average diesel price has surpassed $6 a gallon for the first time ever due to supply disruptions caused by the U.S.-Iran war and Ukrainian attacks on Russia's refineries. However, experts caution that the rally's durability will depend on China, the world's largest crude importer, and whether it continues to buy oil.
OPEC has lowered its forecast for global oil demand growth in 2026 to 380,000 barrels per day, marking the fifth consecutive downward revision. Analysts predict that WTI crude may retest its $119.48 high from early March if supply disruptions persist and China's buying continues.