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US Oil Update: Crude Surges as Centcom Launches 7th Round of Strikes Against Iran

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Crude futures neared 5% in after-hours trading on Friday as US-Iran military attacks and escalating security risks around Middle East shipping routes stoked concerns over potential disruptions to global crude supplies.

Front-month West Texas Intermediate crude futures jumped 4.46% to $82.47 per barrel, while Brent futures advanced 4.83% to $88.30/bbl.

Saxo Bank strategists said that crude extended its rally as energy and refined fuel flows through the Strait of Hormuz continue to slow amid the escalating conflict between the US and Iran.

The analysts said that renewed disruption has interrupted the recent recovery in regional supply, reviving concerns about tighter global markets.

US Central Command said a seventh round of air strikes was underway beginning at 3 p.m. ET on Friday with the goal of further "degrading Iranian military capabilities."

The attacks come a day after the US military destroyed a surveillance tower on Thursday belonging to Iran's Islamic Revolutionary Guard Corps on the country's southeastern coast.

The US is also reportedly sending dozens of refueling planes to Israel, raising expectations of a near-term escalation in the Middle East conflict that has roiled energy markets in recent months.

Iran, in response, attacked US military infrastructure in Bahrain, Jordan, Kuwait, Oman, Qatar and Syria as Tehran steps up its counterstrikes since fighting picked up early last week.

Kuwait reported strikes on a water desalination and electricity plant, with many power-generation units sustaining damage.

Tehran also fired at Syria, apparently for the first time since the outbreak of the conflict, targeting what it described as a US special forces base in Tanf, an operation that was refuted by Centcom.

Soojin Kim, research analyst at MUFG, said fresh US strikes on Iranian military targets, alongside attacks on vessels near Iran's main export terminal and missile threats extending to Qatar and the Bab el-Mandeb shipping route, heightened fears of broader regional disruption.

US oil and gas stocks climbed this week, buoyed by a jump in crude prices as escalating tensions in the Middle East prompted traders to recalibrate risk in the energy sector ahead of Q2 earnings season, RBC Capital Markets strategists said in a note on Friday.

The analysts said the commodity price spike helped lift the XOP energy sector index by 4%, decoupling from natural gas, which saw Henry Hub prices slide 4%.

Meanwhile, RBC said that Canadian crude exports from the Westridge Marine Terminal held steady in June, with robust demand from Asia driving the Trans Mountain pipeline to operate at or near its full contracted capacity.

The terminal in British Columbia saw 26 oil tankers depart in June, matching the previous month's volume, the research firm said.

The steady pace of shipments signals that the expanded Trans Mountain Pipeline continues to perform at its contracted capacity of 712,000 barrels per day.

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