Oil surged on Friday as tensions in the Red Sea escalated following attacks by the US and its allies against Yemeni sites controlled by Iran-backed Houthi rebels.

West Texas Intermediate (CL=F) crude went as high as 4% during trading but settled 0.9% higher at just over $72 per barrel. Brent (BZ=F) crude oil, the international benchmark, closed up more than 1%, above $78 per barrel after surpassing $80 per barrel during Friday's session.

Over the last month, the price for both WTI and Brent has risen more than 6%.

In a statement delivered on Thursday, President Biden said, "These strikes are in direct response to unprecedented Houthi attacks against international maritime vessels in the Red Sea."

Oil has been seesawing as traders weigh geopolitical risks against growing supplies from the US and other countries.

"While higher global stocks of oil provide a buffer to small disruptions, the escalation of conflict on the Arabian Peninsula itself with a US-led military strike against Houthi rebels is shaking the crude oil market out of complacency," Peter McNally, global sector lead for industrials, materials, and energy at Third Bridge, told Yahoo Finance on Friday.

A further escalation of tensions in the region could amplify fears of a broader war with Iran, which produces close to 3 million barrels of production per day.

"If Iranian production was interrupted, there could be a rise in global prices of up to $30 per barrel," Jay Hatfield, CEO at Infrastructure Capital Advisors, told Yahoo Finance.

Vessels have been advised by the global shipping industry to avoid the Red Sea region that connects to the Suez canal, a critical pathway between Asia and Europe.

On Friday, Danish oil tanker group Torm (TRMD) said it was pausing all shipments through the southern Red Sea, Bloomberg reported. The company owns more than 80 vessels that transport refined energy products and chemicals.

For the last month, Houthis have been targeting vessels as a sign of support for Palestinians in the Israel-Hamas war. Since mid-November "at least 23 commercial vessels have been targeted," according to Freightos Terminal, a shipping data platform.

In response, shipping rates have soared, data from Bank of America shows.

Last week cargo giants Maersk (MAERSK-A.CO, MAERSK-B.CO) and German shipment company Hapag-Lloyd (HLAG.DE) said they would pause voyages through the region until further notice.

Goldman Sachs analysts estimate at least 70%-80% of vessels have been rerouted as of last month, making their journeys 30% longer and more expensive.

"Re-routing of vessels from Suez via the Cape in response to recent attacks on commercial vessels in the Red Sea is significantly reducing available space on container ships," Goldman analyst Patrick Creuset wrote in a note to investors. "Depending on how long the disruption lasts, it could lead to supply chain disruptions and significantly higher transport costs, especially on Asia-Europe trades."

Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.