U.S. crude oil prices climbed above $90 per barrel on Friday, marking the first such level in more than two years. Prices jumped from under $73 a week prior, amid escalating military operations launched by the U.S. and Israel against Iran and its proxies.
Strait of Hormuz Disruption Halts Tanker Traffic
Fears of Iranian drone or missile strikes have halted nearly all tanker movements through the Strait of Hormuz, the sole maritime outlet from the Persian Gulf. This vital route carries 20 percent of global oil demand. The strait, bordered by Iran to the north, channels shipments from Saudi Arabia, Kuwait, Iraq, Qatar, Bahrain, the United Arab Emirates, and Iran.
Expected Duration of Price Rally
U.S. Energy Secretary Chris Wright stated the surge will likely persist for weeks, not months.
“Iran has been an escalator of energy prices for 47 years, the whole history of their regime,” Wright remarked. “We’ve got a little bit of an interruption right now to finally put an end to their ability to wreak havoc, to kill Americans, and to terrorize their neighbours.”
Gas Prices Climb in U.S. and Canada
U.S. average gas prices rose 34 cents per gallon last week to $3.32, or roughly 120 cents per litre. In Canada, prices hit 135.3 cents per litre after airstrikes began last weekend, up from 128.8 cents a month earlier, per GasBuddy data. Gas Wizard projections show averages nearing 153 cents per litre by Saturday.
