Oil Prices Surge to Multi-Month Highs on Supply Fears

Oil prices surged to multi-month highs this week, driven by escalating geopolitical tensions and significant supply disruptions in the Middle East. Brent crude futures rose to a four-month high of $110 on Friday before closing at $104.60, marking an 8.7% weekly gain. U.S. West Texas Intermediate crude also climbed, closing at $102.48 per barrel on Thursday, its highest level since mid-May. Analysts attribute the sharp rally to persistent risks in the Persian Gulf, with no clear path to de-escalation. The U.S. Energy Information Administration estimates that oil flows through the Strait of Hormuz have collapsed by 77% since late 2025, falling from 21.6 million barrels per day to just 4.9 million in the second quarter of 2026. This severe disruption has forced shippers to reroute volumes through alternative paths like the Bab el-Mandeb strait, increasing transit times and costs. The supply crunch has been compounded by reports that Saudi Arabia informed OPEC its crude output plunged in August to the lowest level since 1990 due to renewed hostilities with Iran. This report has not been independently confirmed. Meanwhile, the U.S.