Oil may get another run as liquid gold.

Crude (CL=F) futures surged 9% last week — its biggest weekly gain since March 2023 — driven by escalating tensions in the Middle East.

Israel’s vow to retaliate against Iran’s missile attack has prompted more traders to bet on $100 oil, pushing bullish Brent crude oil wagers to a five-week high.

I had a chance to speak with Rystad Energy’s Claudio Galimberti, who told me that traders are "clearly factoring in the risk of a big supply disruption" as tensions in the Middle East rise to "one of the highest levels in four decades."

Iran is a major player in the global oil market, producing more than 3 million barrels of oil a day, so the growing risk of a supply disruption could be a “big tailwind to prices” in the near term, according to Blue Line Futures’ Bill Baruch.

“That's going to push crude oil prices significantly higher. That is a game changer,” Baruch warned.

If you’re looking for ways to hedge against the risk of supply disruption, Galimberti sees Exxon Mobil (XOM), Chevron (CVX), and Shell (SHEL) among the “clear beneficiaries” due to limited exposure to the Middle East.

Judging by the stock moves this past week, it looks like Wall Street agrees. Exxon shares surged 7.8% to an all-time high, while Chevron climbed 3.6%.

Wall Street has been trying to assess the risk of a possible broader conflict. One scenario being discussed is the potential blockage of the Strait of Hormuz, a critical passageway and hub for the global oil market, which accounts for nearly 30% of world oil trade.

It’s a potential threat that Wall Street pros will be monitoring closely in the days to come.

Goldman Sachs’ Jenny Grimberg echoed the rising risk of significant disruptions, writing in a note last week that the “biggest impacts of the conflict are likely to come through a disruption in energy supplies, with a potential closure of the Strait of Hormuz likely to lead to a significant further rise in oil prices, which, in turn, could put renewed upward pressure on inflation and weigh on growth.”

Goldman estimates Brent could peak around $90 per barrel if OPEC moves to rapidly offset a disruption of 2 million barrels per day for six months. However, if OPEC does not move to cushion a shortfall, the team sees prices peaking in the mid-$90s.

And experts warn the fallout from any further escalation in the Middle East could spread far beyond the energy market. Wells Fargo Investment Institute’s Paul Christopher said a wider conflict will prompt investors to reposition into “perceived havens.”