Oil Prices Surge Past $100 Amid Escalating Iranian Attacks in Persian Gulf

Oil prices rebounded to a new high of $100.43 per barrel on Friday, marking the first time the benchmark has exceeded $100 since early 2024. The benchmark contract, CL=F, rose 3.2% in intraday trading amid escalating tensions in the Strait of Hormuz, where Iranian-backed militias have launched at least 12 coordinated vessel attacks over the past 60 days. The attacks, targeting commercial tankers and escorted naval convoys, have forced shipping companies to reroute vessels through longer, more expensive sea lanes, increasing global freight costs and reducing available supply momentum. The persistent disruption has triggered a recalibration of risk models across energy markets. According to market analysts, the lack of diplomatic progress or military deterrence response from regional allies has removed any near-term expectation of de-escalation. This has led to a structural tightening in crude supply, with global inventories falling by 8.6 million barrels last week—marking the third consecutive weekly decline. The sustained pressure on supply has also elevated the VIX index to 24.7, the highest level in seven months, signaling increased investor anxiety. The energy sector reflected the shift in sentiment, with the XLE ETF surging 4.8% on the day, led by gains in major integrated oil producers including Exxon Mobil (XOM), Chevron (CVX), and TotalEnergies (TTE). Exploration and production firms with significant Middle East exposure saw particularly sharp gains, as investors priced in potential supply shortages. Meanwhile, defense contractors with maritime surveillance and missile defense capabilities—such as Lockheed Martin (LMT) and Raytheon Technologies (RTX)—also posted double-digit percentage increases in pre-market trading.