Oil Prices Surge to 7-Month High Amid Escalating U.S.-Iran Tensions

Global oil markets rallied Friday, with Brent crude reaching $89.45 per barrel—the highest since July 2025—driven by renewed fears of military escalation between the United States and Iran. The spike followed reports that President Donald Trump stated during a press briefing that a U.S. military response against Iran remains on the table, citing Iran’s continued advancements in its nuclear program despite recent diplomatic efforts. The increase reflects a sharp reversal from earlier in the week, when oil had settled below $83 per barrel. In the past 48 hours, the benchmark has gained nearly 7%, underscoring the sensitivity of energy markets to geopolitical volatility. West Texas Intermediate (WTI) crude also climbed, closing at $86.90 per barrel, its highest level since August 2025, reinforcing the broader market shift. Energy analysts note that the market is pricing in potential supply disruptions, particularly from the Strait of Hormuz, a critical chokepoint for global oil shipments. Any military action involving Iran could lead to significant curtailment in crude exports from the region, with Iran currently producing around 3.9 million barrels per day. The Organization of the Petroleum Exporting Countries (OPEC) has not yet signaled any production adjustments in response. Investors across the global energy sector reacted swiftly, with major oil producers such as ExxonMobil (XOM), Chevron (CVX), and TotalEnergies (TTE) seeing equity gains of 2.1% to 3.7% on the day. Meanwhile, energy-related ETFs like XLE and OIH posted strong rebounds, with the XLE ETF rising 2.8%. The rally underscores how geopolitical risk continues to overshadow broader economic indicators, including inflation data and central bank policy signals.