Crude Oil Soars: Middle East Tensions Drive Biggest Surge in Over 3 Years

Oil markets roared to life on Friday as crude prices logged their sharpest single-day gains since 2022, driven by a sudden spike in geopolitical tensions. The trigger? Israel launched air strikes on Iranian military and nuclear facilities, marking a serious escalation in Middle East conflict risk.

A Sharp Repricing of Risk

Front-month WTI crude (CL1:COM) surged +7.2% to close at $72.98/bbl — its highest settlement since February 11 and the biggest one-day jump in more than three years. Brent crude (CO1:COM) wasn’t far behind, climbing +7% to $74.23/bbl.

Traders had been pricing in a supply surplus for most of the year, with OPEC+ relaxing output cuts and production climbing in Brazil and Guyana. But that narrative flipped quickly. The latest strikes — although sparing oil infrastructure — have forced markets to consider worst-case scenarios, including potential disruptions at the vital Strait of Hormuz.

What Analysts Are Saying

J.P. Morgan warned that crude could hit $120/bbl if conflict shuts down Hormuz traffic. Goldman Sachs, while not expecting actual supply disruption, revised up the geopolitical risk premium in its oil forecast. Still, it sees prices dropping to $59/bbl (Brent) and $55/bbl (WTI) by Q4, before easing further in 2026 as supply builds.

Their view: short-term upside risk, medium-term downside pressure — a tension now baked into market pricing.

Diesel & Gasoline Surge Too

Ultra-low sulfur diesel (HO1:COM) soared +7.7% to $2.3587/gal — the highest since February 27 — as supply concerns mounted. Diesel gained 11% over the week.

Gasoline (RBOB, XB1:COM) also jumped +3.9% to $2.2276/gal, posting a 7.2% weekly gain.

Natural gas (NG1:COM) piggybacked on the oil rally, ending +2.5% on Friday at $3.581/MMBtu. Still, it was down 5.3% for the week.

Energy Stocks Catch Fire

It wasn’t just commodities. The Energy Select Sector SPDR Fund (XLE) climbed +1.7% on Friday and +5.7% for the week, outperforming broader markets.

Six of the S&P 500’s top 15 gainers came from the oil & gas sector:

• Halliburton (HAL) +5.5%

• APA Corp. (APA) +5.3%

• EOG Resources (EOG) +3.9%

• Occidental Petroleum (OXY) +3.8%

• Diamondback Energy (FANG) +3.7%

• Targa Resources (TRGP) +3.3%

Other notable winners:

• Matador Resources (MTDR) +4.3%

• Murphy Oil (MUR) +4.2%

• Antero Resources (AR) +4.1%

• Devon Energy (DVN) +3%

• Exxon Mobil (XOM) +2.2%

Weekly Oil ETF Performance

Oil ETFs rallied hard:

• USO +6.89% Friday, +13% for the week

• Brent (BNO) +11.7% for the week

• Leveraged ETFs like UCO and GUSH also surged

Top individual energy gainers this week:

• Robin Energy (RBNE) +409.1%

• Houston American Energy (HUSA) +220.8%

• Indonesia Energy (INDO) +101.5%

• KLX Energy (KLXE) +41.7%

• Green Plains (GPRE) +33.8%

But Not All Shined

A few names bucked the rally:

• Hycroft Mining (HYMC) -28.7%

• Perpetua Resources (PPTA) -26.1%

• Foremost Clean Energy (FMST) -25.1%

The Takeaway

Oil may have just had its biggest single-day leap in years — but what comes next is still uncertain. While supply remains intact for now, the broader concern is about escalation and unpredictability in the Middle East.

Markets are recalibrating quickly. From $72 WTI to speculative calls of $120 oil, the stakes are rising fast. Energy investors — and consumers — would do well to stay nimble. Volatility is back.