Key Highlights
- Brent crude reached $101/barrel Thursday before closing near $98, recording a 6.6% daily gain
- Tanker strikes in Iraqi territorial waters of the Persian Gulf resulted in at least one fatality
- Oman ordered full evacuation of vessels from Mina Al Fahal export facility as safety measure
- Chinese authorities implemented refined fuel export prohibition for March to secure domestic reserves
- IEA coordinated unprecedented 400 million barrel strategic reserve deployment to stabilize markets
Global oil markets experienced significant upward momentum Thursday following tanker incidents and terminal closures that intensified concerns about Middle Eastern supply availability.
Brent crude reached an intraday peak of $101.59 per barrel during early trading hours before moderating to approximately $98. West Texas Intermediate climbed more than 6% to $92.61. These benchmarks had previously approached $120 earlier in the week.
Two commercial oil tankers sustained damage in the northern Persian Gulf within Iraqi territorial boundaries. Online footage depicted the vessels engulfed in flames. Farhan al-Fartousi, Iraqi port director, confirmed to The Wall Street Journal that one crew member perished while rescue operations continued to extract remaining personnel. Iraqi authorities subsequently suspended operations at all national oil ports.
Oman ordered the evacuation of all maritime vessels from its Mina Al Fahal export terminal following the series of regional shipping incidents. This facility represents one of the limited remaining channels for Middle Eastern crude to access international markets. Terminal operations resumed normal activity later.
The Strait of Hormuz, accounting for approximately 20% of worldwide oil supply transit, continues to face effective closure. Iranian authorities have declared their intent to block all crude passage through the waterway. This obstruction has compelled Gulf producers including Iraq, Kuwait, and Saudi Arabia to reduce production volumes.
Chinese Authorities Restrict Refined Fuel Exports
Chinese officials announced immediate prohibition of refined fuel exports throughout March. Domestic refiners simultaneously began canceling previously agreed gasoline and diesel export shipments. Leading processors had already received instructions to halt new contractual commitments.
Goldman Sachs projected that oil prices could surpass the 2008 record of $147.50 per barrel should Hormuz disruptions persist through March.
ANZ analysts observed that markets continue to underestimate the probable duration of supply interruptions. “Once a conflict extends beyond the initial shock phase, oil markets tend to shift from pricing uncertainty to pricing endurance,” their analysis stated.
Strategic Reserve Deployments Cap Additional Price Increases
The International Energy Agency announced coordination of a historic 400 million barrel release from strategic petroleum reserves. President Donald Trump stated Wednesday that the United States would contribute 172 million barrels from the Strategic Petroleum Reserve.
Despite those interventions, Sanford C. Bernstein analyst Neil Beveridge characterized reserve releases as “nothing compared with the 20 million barrels” per day of disruption stemming from the Hormuz closure.
The military confrontation reached its thirteenth consecutive day Thursday with resolution remaining uncertain. Iranian officials indicated any ceasefire agreement would require assurances from both Washington and Israel regarding future strikes against Iranian targets. The United States has yet to accept these conditions.
Trump addressed supporters in Kentucky Wednesday stating the conflict would conclude soon, while adding the U.S. “would stay as long as it takes.”
Weekly U.S. petroleum inventory data published Wednesday revealed an unexpectedly large accumulation of 3.8 million barrels during the preceding week.
