On Friday, crude oil prices surged beyond $112 per barrel, following Iraq’s declaration of force majeure at all its foreign-operated oilfields and drone strikes targeting two refineries in Kuwait.

Brent crude, the global oil benchmark, saw a significant increase of 3.26%, equating to a $3.54 rise, closing the day at $112.19 per barrel. Simultaneously, U.S. crude oil experienced a 2.27% uptick, adding $2.18 to reach $98.32 per barrel.

According to sources within Iraq’s oil ministry, the force majeure was announced due to an inability to transport crude via the Strait of Hormuz. This vital passage has seen a sharp decrease in oil tanker traffic, attributed to recent Iranian attacks.

The refineries in Kuwait, Mina Al-Ahmadi and Mina Abdullah, were struck by drones on Thursday. The assault on Mina Al Ahmadi ignited fires in several units, leading to a cautious shutdown of parts of the facility, as reported by the Kuwait Petroleum Corporation.

Saudi energy officials have indicated that if disruptions caused by Iran persist until late April, crude oil prices might soar beyond $180 per barrel, according to the Wall Street Journal.

Meanwhile, U.S. Treasury Secretary Scott Bessent mentioned Washington’s potential plan to lift sanctions on Iranian crude oil stored on tankers, in an effort to alleviate the price surge following Iran’s closure of the Strait.

“In the coming days, we may unsanction the Iranian oil that’s on the water, about 140 million barrels,” Bessent told Fox Business Network.

He said bringing the sanctioned Iranian crude back into global markets would help cap prices over the next 10 to 14 days.

Israeli Prime Minister Benjamin Netanyahu also told reporters that Israel is assisting U.S. efforts to reopen the Strait of Hormuz, according to wire reports. He added that Iran no longer has the capability to enrich uranium or produce ballistic missiles, adding that the war could end sooner than many expect.

Citi said the Iran conflict has driven a sharp rally across oil and related commodities, prompting it to lift its near-term price outlook.

The bank now expects Brent and WTI to climb to $120 per barrel over the next one to three months, and to $150 per barrel in a bull-case scenario if disruptions intensify. 

Still, its base case assumes de-escalation within four to six weeks, which would allow Brent to ease back to $70–$80 by year-end.

At the same time, key crude spreads have widened sharply, with Citi raising its Brent-WTI forecasts to reflect elevated freight costs and strong U.S. Gulf Coast demand for inland barrels.