Brent crude climbed above $116 a barrel on Friday, reaching its highest level since March, as investors assessed the prospect of a drawn-out confrontation between the United States and Iran alongside fresh threats to energy infrastructure across the Middle East.
The rally reflects growing concern that the conflict could continue disrupting oil supplies and shipping routes, adding to inflationary pressures worldwide.
The move came after US Ambassador to the United Nations Mike Waltz told the Financial Times that Washington was prepared for a prolonged standoff with Tehran, potentially lasting another year if an agreement on Iran’s nuclear programme and the restoration of shipping through the Strait of Hormuz remained out of reach.
US prepares for a prolonged confrontation with Iran
Waltz said the US could maintain its blockade of Iranian ports indefinitely while continuing to tighten economic pressure on Tehran.
The comments signal that Washington is preparing for the possibility that its objectives may not be achieved quickly, even as the administration hopes military pressure and sanctions will force Iran to make concessions.
Those objectives include addressing Iran’s highly enriched nuclear material and securing an agreement restricting domestic uranium enrichment.
President Donald Trump and Israeli Prime Minister Benjamin Netanyahu have also renewed threats of a possible fresh offensive after the November 3 US midterm elections, according to the Financial Times.
The prospect of an extended conflict has kept traders focused on the risk that energy flows will remain vulnerable, particularly if military activity intensifies around major oil-producing areas and strategic shipping corridors.
Fresh attacks raise oil supply concerns
Brent crude rose as much as 2.8% to $116.32 a barrel on Friday while US West Texas Intermediate crude also advanced, trading above $101 a barrel.
The gains followed escalating clashes involving Yemen’s Iran-aligned Houthi movement and Saudi Arabia. Saudi Aramco ordered staff to evacuate its headquarters in Dhahran on Thursday as fighting intensified.
Separately, the United Arab Emirates reported an oil spill off its coast, adding to concerns about the safety of regional energy infrastructure and maritime traffic.
The developments have heightened concern about the Bab el-Mandeb Strait, a key shipping chokepoint at the entrance to the Red Sea.
Reuters also reported that a pipeline shutdown in Libya had reduced output from two oilfields, adding another potential source of supply tightness.
Prolonged disruption threatens to keep prices elevated
The oil rally has continued despite efforts to maintain and redirect energy shipments, with traders increasingly pricing in the possibility of further escalation rather than only current supply losses.
UBS analyst Giovanni Staunovo told Reuters that volatile oil flows and elevated freight rates had left the market undersupplied, warning that renewed escalation could trigger further disruptions.
Brent was on track for a third consecutive weekly gain, while rising energy costs risk adding to inflation and complicating the outlook for central banks.
With no clear timeline for a resolution to the US-Iran confrontation, oil prices are likely to remain sensitive to developments around regional infrastructure, shipping lanes and the possibility of renewed military action.
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