Oil markets are bracing for a potential supply crisis as the breakdown of a US-Iran truce unleashes a new wave of military strikes across the Gulf, with Tehran now signaling it could direct the Houthis to block the Red Sea shipping route. Brent crude futures edged up 7 cents to $84.30 a barrel on Friday, while US West Texas Intermediate rose 16 cents to $79.11. Both benchmarks have surged nearly 12% this week, with Brent headed for a third consecutive weekly gain and WTI on track for a second. Main Developments The US launched two major waves of air strikes on Wednesday — the first time since a memorandum of understanding paused hostilities last month — mostly targeting areas near Iran's southern coast, and continued firing into Thursday. A new wave of strikes began at 2pm EDT on Thursday, according to the US Central Command, marking the sixth consecutive night of operations aimed at degrading Iranian military capabilities. Read also: Why Trump's social media posts are now a paid trading tool Iran has retaliated with missiles and drones directed at US military bases in neighboring states, including a barrage at an expanded air base in Jordan. Qatar's defense ministry reported that its armed forces intercepted an Iranian missile attack early Friday, with a child injured by shrapnel from the interception. Background The conflict escalated after a fragile truce between Washington and Tehran broke down, limiting oil flows through the Strait of Hormuz — a critical chokepoint for global crude shipments. Iran's leadership has now instructed the Houthi movement to prepare to shut the Red Sea oil route if the US strikes Iranian power infrastructure, according to three sources familiar with the matter. This dual-risk scenario — threats to both the Gulf and Red Sea — is embedding a geopolitical premium into oil prices, said Tim Waterer, chief market analyst at KCM Trade. Why It Matters The Red Sea route is a major artery for global oil trade, and its closure would compound supply disruptions already rippling from the Gulf. International Energy Agency Executive Director Fatih Birol voiced deep concern on Thursday, stating at a Council on Foreign Relations event in Washington that "oil security is still a critical issue" and warning that the situation could worsen if it does not improve within weeks. Analysts at IG noted that technically, WTI could test the mid-$80s if it holds above key support in the mid-$70s, suggesting further upside risk. What's Next The trajectory hinges on whether the US maintains its daily strike tempo and how Iran responds to any attacks on its infrastructure. Tehran's threat to activate the Houthis adds a new dimension to the conflict, potentially disrupting one of the world's busiest oil transit lanes. Markets will watch for any diplomatic moves or retaliatory actions that could either de-escalate or further inflame the situation in the coming days.