Oil prices extended gains as the US-Israeli conflict with Iran disrupted crude flows to key importers, with Brent crude climbing toward $85 a barrel after a 12% jump in the first three days of the week. West Texas Intermediate hovered near $78 as the conflict entered its sixth day with no resolution in sight. China, the world's top oil importer, ordered its largest refiners to suspend diesel and gasoline exports to prioritize domestic needs.

Traffic through the Strait of Hormuz has plummeted by over 95%, effectively closing the critical waterway that handles about 15 million barrels of oil daily. Major crude carriers and gas tankers are avoiding the route, while ships still moving have turned off location transponders. The International Energy Agency warned that any disruption to flows through this narrow passage would have huge consequences for world oil markets.

Brent's prompt spread widened to $3.89 a barrel in backwardation, signaling near-term tightness compared to 57 cents a month ago. The conflict has spread across the Middle East, lifting freight rates and creating disruption for both producers and importing nations. US crude stockpiles expanded by 3.5 million barrels last week to reach the highest level since May, according to the Energy Information Administration.