Energy shares rally as oil breaches $100 after Iran strikes
US military action spares key export terminal while Strait of Hormuz remains blocked
Brent crude surged above $100 per barrel on Friday as the United States conducted military strikes on Iran's Kharg Island, driving energy stocks higher amid the worst oil supply disruption in modern history.
Oil prices climbed to $103.86 per barrel, marking a more than 40% increase from approximately $70 before the conflict began on February 28. The surge follows President Donald Trump's announcement that U.S. forces "obliterated every military target" on Kharg Island while deliberately sparing the island's oil infrastructure.
The measured approach to the bombing campaign has provided some relief to energy markets, as Kharg Island handles roughly 90% of Iran's crude exports. However, Iranian exports from the terminal have already plunged 51.7% to 0.98 million barrels per day from 2.04 million barrels per day before hostilities escalated, according to maritime analytics firm Windward.
The more significant disruption stems from Iran's effective closure of the Strait of Hormuz, the critical maritime passage through which approximately 20% of global oil supply flows. Iranian forces have reportedly laid mines and attacked commercial vessels, causing tanker traffic to grind to a halt and insurance premiums for cargo operators to soar.
Gulf producers are curtailing output as onshore storage reaches capacity, further tightening global supplies. The combined effect has created what analysts describe as the largest supply disruption in history, with an estimated 20 million barrels per day halted across the region.
"Any damage to Kharg Island would result in a longer-lasting loss of supply and further spike crude prices," Rigzone reported, citing analyst warnings ahead of the weekend. The U.S. decision to spare the terminal's loading facilities has prevented what could have been an even more severe price shock.
Energy sector equities have rallied in tandem with crude prices, though broader equity markets have suffered. The crisis has fueled inflation expectations and triggered declines in major European and Asian stock indices as investors brace for prolonged elevated energy costs.
Washington has attempted to stabilize global energy markets by temporarily easing sanctions on Russian oil shipments, but the geopolitical risks outweighing supply-side interventions have kept prices elevated. Analysts expect oil to remain volatile as the conflict continues and markets assess whether the Strait of Hormuz can be safely reopened.