US-Iran Tensions Spark Oil Price Surge
Oil prices surged on Friday as tensions between the US and Iran continued to escalate. The Brent global benchmark rose 1.03% to $87.97 per barrel, while West Texas Intermediate gained 1.62% to $82.56 per barrel.
The increase comes after Washington threatened Tehran with an open-ended naval blockade and financial penalties. US Defence Secretary Pete Hegseth stated that the American navy could keep a presence in the region to enforce the blockade of Iran in the Strait of Hormuz, which he said could be sustained indefinitely by rotating vessels.
US Treasury Secretary Scott Bessent added that Washington had plans to impose further financial damage on Tehran, with more announcements expected next week. The measures would be unlike anything seen in the history of economic isolation of a nation, according to Bessent.
Norbert Rucker, head of economics and next-generation research at Swiss lender Julius Baer, said that the oil market continued to be affected by uncertainty surrounding the US-Iran standoff. He noted that Middle Eastern geopolitics supports oil prices as the deadlock between the two countries fuels supply worries.