Oil Surges Nearly 10% on US-Iran Strikes as Diesel Hits Record

Crude oil benchmarks surged to weekly gains of nearly 10% following renewed U.S.-Iran military hostilities and constrained tanker flows through the Strait of Hormuz, pushing U.S. retail diesel to a record average of $5.85 a gallon.

The weekly advance marks one of the sharpest upward moves for energy commodities in recent months, driven directly by supply route impairments in the Middle East. Compared to historical baseline shipping figures, the active military conflict has triggered immediate logistical bottlenecks across key international waterways.

"All sectors of the economy are affected by diesel. This is one of the reasons why the government bond yields in the United States are so high, it's the expectation that inflation will continue to go up," said Claudio Galimberti, chief economist at Rystad Energy.

Commodity Pricing and Weekly Gains

At the close of trading, Brent crude futures settled at $96.28 a barrel, up 76 cents, or 0.8%. West Texas Intermediate crude finished at $91.48 a barrel, up 18 cents, or 0.20%.

For the full week, Brent crude rose 7.6% while U.S. crude gained nearly 10% as supply routes in the Middle East remained impaired. Driving the domestic pinch, average U.S. diesel prices hit a record high of $5.85 a gallon on average, according to AAA data.

Strait of Hormuz Traffic Drops

The physical impact on transport is visible in preliminary shipping statistics. Only four commodity vessels transited the Strait of Hormuz on Thursday, standing well below the 10-day average tally of about 15 ships.

"Oil seems to be in a phase where the conflict’s gridlock and recurring hostilities are regularly awakening a risk premium embedded in prices," said Norbert Rucker, head of economics and next generation research at Julius Baer.

Macroeconomic Pressures and Federal Reserve Policy

The spike in energy and transportation costs feeds directly into broader economic metrics, complicating monetary policy considerations as inflation expectations reset.

"The strong employment figures points to an interest rate hike by the Federal Reserve and that was weighing on WTI," said John Kilduff, partner with Again Capital.