Oil surges 35%, biggest weekly futures gain since 1983

U.S. crude oil on Friday posted its biggest weekly gain in futures trading history, as the escalating war in the Middle East has triggered a major disruption to global fuel supplies.

West Texas Intermediate futures surged 12.21%, or $9.89, to close at $90.90 per barrel. Global benchmark Brent rallied 8.52%, or $7.28, to settle at $92.69 per barrel.

U.S. crude soared 35.63% for the biggest weekly gain in the history of the futures contract dating back to 1983. Brent jumped about 28% for its biggest weekly gain since April 2020.

President Donald Trump on Friday demanded unconditional surrender from Iran, raising fears of a prolonged war that could wreak havoc on the global oil and gas market. The war has already brought traffic in the Strait of Hormuz, a critical shipping route for energy supplies, to a near standstill.

Qatar’s energy minister, Saad al-Kaabi, told The Financial Times on Friday that crude prices could reach $150 per barrel in the coming weeks if oil tankers were unable to pass through the Strait.

This could “bring down the economies of the world,” Kaabi said.

“Everybody that has not called for force majeure we expect will do so in the next few days that this continues,” Kaabi told the FT. “All exporters in the Gulf region will have to call force majeure. If they don’t, they are at some point going to pay the liability for that legally, and that’s their choice.”

The Trump administration on Friday announced a $20 billion insurance program for oil tankers in the Persian Gulf, though the measure did little to calm the crude market.

Iraq has shut down 1.5 million barrels per day of production, two Iraqi officials told Reuters Tuesday. Kuwait has also started cutting production after running out of storage space, people familiar with the matter told The Wall Street Journal on Friday.

“The market is shifting from pricing pure geopolitical risk to grappling with tangible operational disruption,” Natasha Kaneva, head of global commodities research at JPMorgan, told clients in a Friday note.

Production cuts could approach 6 million bpd by the end of next week if the Strait is not open to traffic, Kaneva said. JPMorgan expects the United Arab Emirates to show supply constraints next week.

The average price for a gallon of regular gasoline jumped nearly 27 cents in the last week through Thursday to $3.25, according to data from U.S. travel organization AAA

The war between Iran and the U.S. entered its seventh day on Friday. In a press conference on Thursday, U.S. Defense Secretary Pete Hegseth said the U.S. had “only just begun to fight.”

“Iran is hoping that we cannot sustain this, which is a really bad miscalculation,” he told reporters.

CNBC