(Investing) – Oil prices soared Friday, with Brent climbing above $90/bbl, after the release of weak U.S. jobs data, adding to previous gains as the escalating conflict in the Middle East raised concerns over global supply disruptions.
At 09:30 ET (14:47 GMT), Brent Oil Futures expiring in May gained 6.6% to $91.10 per barrel, while West Texas Intermediate (WTI) crude futures gained 9.5% to $88.72 per barrel.
In the previous four trading sessions since the war started, Brent has climbed 18% while WTI has gained 21%.
Middle East conflict shows few signs of easing
Crude prices have been supported this week as the conflict in the Middle East entered its seventh day on Friday, with fighting between the U.S., Israel, and Iran continuing to escalate.
Missile strikes, retaliatory attacks, and disruptions to energy infrastructure across the region have kept global energy markets on edge.
Concerns have focused particularly on the Strait of Hormuz, a narrow waterway between Iran and Oman that serves as the world’s most important oil transit route.
Roughly 20% of the world’s oil supply passes through the Strait of Hormuz each day, making it a critical chokepoint for global energy trade. Any disruption to shipments through the strait could significantly tighten global supplies and push prices sharply higher.
“The market remains well supported with few signs of de-escalation in the Middle East and a resumption of energy flows in the region,” ING analysts said in a note.
“Clearly, with every day that goes by without flows resuming, the oil market will reprice the amount of supply lost, leaving room for prices to move higher,” they added.
This conflict could last for some time, with U.S. President Donald Trump stating Friday that he wants “unconditional surrender” from Iran, warning there will not be a deal without that.
The market also received a boost Friday after the Financial Times reported a warning from Qatar’s energy ministry that Gulf states would be forced to shut all exports within weeks if conditions in the region don’t change, an outcome that would drive oil to $150 a barrel.
U.S. allows India to buy Russia oil
In a move to ease some supply concerns, the U.S. announced it would allow the sale of Russian oil to India for a period of 30 days.
“While this might help put some immediate downward pressure on the market, it is not a game-changer. The only way for prices to come down on a sustained basis is a resumption of oil flows through the Strait of Hormuz,” ING analysts wrote.
Analysts say the surge in oil prices could fuel inflation pressures globally, especially if the conflict disrupts supplies for an extended period. Higher energy costs could also complicate the outlook for central banks, including the U.S. Federal Reserve.
That said, the Trump administration is ruling out deploying the Treasury Department to trade oil futures for now, Bloomberg News reported on Friday, citing a person familiar with the matter.
Weak U.S. labor report
Economic data released earlier Friday showed that the U.S. economy unexpectedly shed jobs in February, in a reversal from a robust reading in the prior month, clouding the trajectory of the American labor market.
Total U.S. nonfarm payroll employment edged down by 92,000 jobs in February, compared to estimates for an addition of 58,000. January’s job total was revised down to 126,000, from 130,000.
Meanwhile, the unemployment rate accelerated to 4.4%, faster than expectations that it would match January’s pace of 4.3%.
“This release will remove a lot of the upward pressure being placed on yields from the oil price spike and should pull Fed expectations in a dovish direction,” said analysts at Vital Knowledge, in a note.
(Ayushman Ojha and Scott Kanowsky contributed reporting.)
