Investing.com — Oil prices rose Friday, on track for hefty weekly gains on concerns the Middle East conflict could disrupt crude flows from this key exporting region.

By 09:20 ET (13.20 GMT), the futures traded 0.8% higher at $78.24 a barrel and the Brent contract climbed 0.8% to $74.35 a barrel. 

futures were set to gain around 8% for the week – its steepest since February 2023, while U.S. crude futures’ 7.5% weekly rise would be the largest since March last year.

Crude gains on Middle East risk premium

A risk premium has been added to the crude market as traders await Israel’s response to Iran firing more than 180 missiles into its territory, given the potential for any response to target Iranian oil infrastructure, potentially disrupting supply from this oil-rich region.

The U.S. is discussing whether it would support Israel strikes on Iran’s oil facilities as retaliation for Tehran’s missile attack on Israel, President Joe Biden said on Thursday.

Oil prices could soar by $20 per barrel if Iranian production sees a hit, according to Goldman Sachs.

It is estimated that “if you were to see a sustained 1 million barrels per day drop in Iranian production, then you would see a peak boost to oil prices next year of around $20 per barrel,” Daan Struyven, Goldman Sachs’ co-head of global commodities research, told CNBC’s “Squawk Box Asia” on Friday.

While OPEC has enough spare capacity to compensate for the loss of Iranian supplies, much of that capacity is in the Middle East Gulf region and potentially vulnerable should the conflict escalate further, said Giovanni Staunovo, analyst at UBS.

Nonfarm payrolls impress

The crude market also received a boost Friday after data showed that US employment growth was far stronger than expected in September, with growing by 254,000 jobs last month, increasing from an upwardly-revised mark of 159,000 in August. 

Meanwhile, the decelerated to 4.1%. Forecasts had seen the figure matching August’s pace of 4.2%.

While this bumper jobs report lessens the chances of another aggressive Fed interest rate cut, Chair Jerome Powell had already signaled earlier this week that the central bank would likely opt for more traditional quarter-point reductions moving forward.

Additionally, it could be suggested that this labor market strength could point to a soft landing for the US economy, meaning energy demand would stay fairly strong.