Global oil markets face another volatile week after a US strike on Iran’s main export hub heightened fears of supply disruption across West Asia and deepened concerns over a conflict that has already upended global energy flows.
US President Donald Trump said late Friday that US forces had struck military targets on Iran’s key Kharg Island facility and warned that further attacks could target energy infrastructure if Tehran interferes with transit through the Strait of Hormuz — the narrow waterway linking the Persian Gulf with global markets. Traffic through Hormuz has largely stalled since the conflict escalated.
Kharg Island handles most of Iran’s crude exports, making it a critical node in global supply chains. While Iranian media said exports were continuing, the strike has heightened concerns about further retaliation and damage to regional energy infrastructure.
The conflict has already triggered significant volatility in oil markets. Brent crude surged 11 per cent last week, touching $119.50 a barrel before closing just above $103 — its most volatile stretch since futures trading began in 1988.
Market participants expect heightened nervousness when trading resumes. “We are still hurtling down the highway at breakneck speed, in the left lane, with no sign of when we’re going to be able to veer off onto the exit ramp,” said Stephen Schork, founder of Radnor, Pennsylvania-based Schork Group, adding he would not be surprised to see crude open above $117 a barrel, and “we could even possibly open up above that number.”
The turmoil is also accelerating efforts by Asian countries to diversify energy sources away from West Asia.
Environmental Protection Agency Administrator Lee Zeldin said several Indo-Pacific nations are increasingly looking to the United States as an alternative energy supplier amid the ongoing instability.
Speaking at an energy forum in Tokyo, Zeldin said US companies had secured more than $50 billion in energy deals over the past 48 hours as countries sought to diversify supply chains following the disruption in Gulf exports.
Indo-Pacific countries are now “far more motivated” to reduce reliance on West Asian supplies, he said, noting that energy shipments from Alaska could reach Asian markets in roughly eight days compared with about 28 days from West Asia.
