TLDR
- Brent crude temporarily surpassed $101/barrel on Thursday before closing near $98, registering a 6.6% daily gain
- Tanker strikes in Iraqi territorial waters of the Persian Gulf resulted in at least one fatality
- Oman evacuated vessels from its Mina Al Fahal terminal as a preventative measure
- China implemented a ban on refined petroleum product exports throughout March to safeguard domestic reserves
- The IEA unveiled an unprecedented 400 million barrel strategic reserve release aimed at stabilizing prices
Crude oil markets experienced another dramatic surge Thursday following fresh tanker attacks and terminal shutdowns that heightened anxieties surrounding Middle Eastern energy supplies.
Brent crude climbed to an intraday peak of $101.59 per barrel during early trading before retreating to approximately $98. West Texas Intermediate advanced more than 6% to reach $92.61. These benchmarks had previously approached $120 earlier in the week.
Two petroleum tankers sustained attacks in Iraq’s northern Persian Gulf waters. Footage circulated on social media platforms depicted the vessels engulfed in flames. Iraqi port authority director Farhan al-Fartousi confirmed to The Wall Street Journal that one crew member perished, while rescue operations continued for remaining personnel. Iraq subsequently suspended operations at all its oil export terminals.
Meanwhile, Oman preemptively evacuated all vessels from its Mina Al Fahal export facility following the series of regional maritime attacks. This terminal represents one of the limited remaining export channels for Middle Eastern crude to international markets. Normal operations subsequently resumed at the facility.
The Strait of Hormuz, a critical chokepoint handling approximately 20% of worldwide oil supply, continues to face effective closure. Iranian authorities have declared that no crude shipments will transit through the waterway. This blockade has compelled Gulf region producers, including Iraq, Kuwait, and Saudi Arabia, to reduce production levels.
China Tightens Fuel Export Curbs
China declared an immediate prohibition on refined petroleum product exports during March. Chinese refineries have also started canceling previously agreed export shipments of gasoline and diesel. Leading processors in the country had previously received instructions to cease signing additional export agreements.
Goldman Sachs cautioned that oil prices might surpass the 2008 record of $147.50 per barrel should Hormuz Strait restrictions persist through March.
ANZ market analysts noted that trading activity continues to underestimate the probable length of supply disruptions. “Once a conflict extends beyond the initial shock phase, oil markets tend to shift from pricing uncertainty to pricing endurance,” their analysis stated.
Emergency Reserve Releases Limit Further Gains
The International Energy Agency is organizing an unprecedented strategic reserve deployment of 400 million barrels. President Donald Trump announced Wednesday that the United States would contribute 172 million barrels from its Strategic Petroleum Reserve.
Nevertheless, Sanford C. Bernstein analyst Neil Beveridge characterized reserve releases as “nothing compared with the 20 million barrels” per day of supply disruption resulting from the Hormuz closure.
The regional conflict reached its thirteenth consecutive day Thursday without signs of imminent resolution. Iranian officials stated that any ceasefire arrangement would require assurances from both the United States and Israel against future strikes on Iranian territory. Washington has yet to accept these conditions.
Speaking to supporters in Kentucky on Wednesday, Trump predicted the conflict would conclude shortly, while emphasizing the U.S. “would stay as long as it takes.”
U.S. petroleum inventory figures released Wednesday revealed an unexpected stockpile increase of 3.8 million barrels during the previous week.
