Oil Prices Hit Near Four-Year Closing High Amid Escalating Middle East Tensions

Oil prices surged on Friday, reaching their highest closing levels in nearly four years, after Iraq declared force majeure on all oil fields operated by foreign companies. 

The move comes as tensions intensify in the Middle East, with an escalating conflict involving the United States, Israel, and Iran, alongside preparations by Washington to deploy additional Marines and naval forces to the region.

Brent crude futures for May delivery rose by $3.54, or 3.26 percent, to settle at $112.19 per barrel, marking the highest level since July 2022. U.S. West Texas Intermediate crude for April delivery, which expired on Friday, gained $2.18, or 2.27 percent, to close at $98.32 per barrel. The more actively traded second-month U.S. crude contract ended at $98.23, up 2.8 percent.

During the session, Brent crude climbed by more than $4 at its peak.

Attacks on Iran’s energy infrastructure have continued, while Tehran has launched retaliatory strikes targeting neighboring countries, including Saudi Arabia, Qatar, and Kuwait.

On a weekly basis, Brent crude rose about 8.8 percent, while front-month WTI edged down roughly 0.4 percent compared to the previous Friday’s close. The price discount between WTI and Brent widened to its largest level in 11 years on Wednesday.

Oil markets are increasingly pricing in the risk of prolonged supply disruptions following the attacks, with expectations that flows could remain constrained for weeks at least, pending the reopening of the Strait of Hormuz.

U.S. Energy Secretary Chris Wright stated that lifting sanctions on stranded Iranian oil shipments at sea could allow supplies to reach Asia within three to four days. 

Treasury Secretary Scott Bessent had previously referenced similar plans, adding that additional releases from the U.S. Strategic Petroleum Reserve remain a possibility in the coming months.

Analysts say prices are likely to remain elevated as long as disruptions to shipping through the Strait of Hormuz persist, and even afterward. Around 20 percent of global oil and liquefied natural gas trade passes through the critical waterway.