West Texas Intermediate crude oil futures surged 7% to $101.48, and Brent crude futures soared 6.3% to $114.81.

Iran has informed the International Atomic Energy Agency of another strike in the vicinity of the Bushehr nuclear power plant, the third such incident in 10 days, with no damage to the operating reactor and no release of radiation reported, the agency said on Friday.

The IAEA said Iran reported the plant’s condition remained normal following the incident.

A heavy water production plant at Khondab in Iran was hit on Friday, Iran told the International Atomic Energy Agency.

"No radiation risk seen as installation contains no declared nuclear material," the U.N. nuclear watchdog said on X.

Iran also reported the Khuzestan steel production factory, which uses radioactive sources, was subjected to strikes on Friday, the IAEA added, saying there was no off-site radiation release.

Meanwhile, two Chinese ships were turned away from the Strait of Hormuz early Friday, and a Thai-flagged cargo ship that had been hit in the waterway has run aground, CNBC reported, citing Iranian state media.

Furthermore, Israel plans to "escalate" its strikes in response to waves of Iranian missile fire, CNN reported, citing Israeli Defense Minister Israel Katz. The two sides continue to exchange fire despite diplomatic efforts.

"The Hormuz closure quickly turned from a shipping disruption to a significant loss of global supply," Morgan Stanley said. "Despite offsets from bypass pipelines and strategic petroleum reserve releases, the market is short by a multiple of the peak-loss feared back in 2022."

The firm does not see the energy market reverting to the pre-conflict levels anytime soon.