Market News

Crude prices surged higher Friday as oil fields in Iraq came under attack and US Donald Trump demanded Iran's unconditional surrender, while stocks slumped after data showed a surprise drop in jobs in the United States.

The US-Israel war on Iran and Tehran's retaliatory attacks across the Gulf region have upended the world's energy and transport sectors.

The international benchmark oil contract, Brent North Sea crude, surged more than six percent to hit $91.89 per barrel, after Trump said only the "unconditional surrender" of Iran would end the Middle East war. That is its highest level in nearly two years.

The main US contract West Texas Intermediate soared more than 11 percent to over $90 per barrel.

Maritime traffic has all but dried up through the Strait of Hormuz, through which a fifth of the world's crude oil and liquefied natural gas supplies run.

Market reaction to the conflict had been tempered by hopes that it would be short, but Trump's demand for Iran's capitulation increases the prospect of a long conflict.

Trump's comments "dashed hopes that the conflict will be averted quickly, and the oil price has continued its push" higher, said XTB research director Kathleen Brooks.

Brent soared by more than a quarter and WTI by a third this past week.

"This is a disaster for the global economy," said Brooks.

The prospect of high energy prices for a sustained period has fanned fears of a fresh spike in inflation that could hit the global economy while curbing the ability of central banks to cut interest rates to prop up growth.

"The longer that key energy infrastructure and shipping routes in the region are affected, the greater the chance of a significant inflationary impact," said AJ Bell investment director Russ Mould.

Attacks on oilfields were reported in southern Iraq and in the northern autonomous Kurdistan region, which forced a US-run oil field to shut production.

Earlier this week, US President Donald Trump pledged to protect ships through the Strait of Hormuz, but shipping companies have exercised caution in the region.

US Energy Secretary Chris Wright said Friday the US Navy was preparing to escort ships through the Strait of Hormuz "as soon as it's reasonable to do it".

Iranian state television on Friday reported a fresh drone strike on a ship in the strategic Strait of Hormuz, resulting in a fire, on the seventh day of the war with the US and Israel.

Meanwhile, data showed the US economy had unexpectedly lost jobs in February, while unemployment also edged up.