Oil prices moved notably higher on Wednesday and continued to gain after markets closed, reflecting heightened supply risk following Iranian strikes on multiple energy facilities in the Middle East. In post-settlement trading, Brent futures were up 5.6%, adding to a 3.8% settlement-day advance to $107.38 a barrel. U.S. West Texas Intermediate crude extended gains to around 4% after settling up 11 cents, or 0.1%, at $96.32.
Benchmark differentials that had recently favored Brent widened further. WTI futures had earlier settled at their widest discount to Brent in 11 years, pressured by a combination of higher U.S. supply from a Strategic Petroleum Reserve release and rising freight costs, while Brent received added support from fresh attacks on regional energy infrastructure.
Details of the regional strikes and damage reported
Qatar’s state oil and gas company reported that the Ras Laffan Industrial City - a major energy-industry hub - sustained what it described as "extensive damage" after being struck by missiles. Saudi authorities said they intercepted and destroyed multiple ballistic missiles targeting Riyadh and foiled an attempted drone attack on a gas facility in the country’s east. Iranian state media reported that Iran issued evacuation warnings for numerous energy facilities across Saudi Arabia, the United Arab Emirates and Qatar, saying those sites would be targeted by strikes "in the coming hours." These warnings followed an attack on Iran’s South Pars gas field, which Israeli media reported was carried out by Israel with U.S. consent; neither Israel nor the United States immediately acknowledged responsibility.
Analysts said activity around the South Pars field and subsequent strikes were pushing energy prices higher. "The attacks on Iran’s South Pars field were boosting oil and gas prices, and any further escalations of attacks to energy infrastructure would continue to raise prices," SEB analyst Ole Hvalbye said.
Shipping chokepoints, output estimates and wider supply implications
The conflict has disrupted shipments through the Strait of Hormuz, a key corridor that handles roughly 20% of global oil and liquefied natural gas supply. Industry estimates cited in market commentary put total oil output cuts in the Middle East at between 7 million and 10 million barrels per day, equivalent to about 7% to 10% of global demand. Those figures underscore the scale of potential lost flows should disruptions persist.
U.S. policy moves aimed at moderating domestic price pressure
In response to rising domestic fuel prices, the U.S. administration announced a 60-day waiver of the Jones Act shipping law, temporarily allowing foreign-flagged vessels to carry fuel, fertilizer and other goods between U.S. ports. The administration also said it would temporarily lift federal smog-cutting requirements on summer-blend gasoline. Officials and analysts said those steps could help slow the rise in U.S. pump prices but were unlikely to materially alter global energy prices.
Despite these measures, U.S. diesel futures surged to nearly a $85 per barrel premium to WTI crude, the largest diesel premium to WTI since October 2022. Washington also issued a general license authorizing certain transactions involving Venezuela’s state oil company PDVSA. In addition, a report said Vice President JD Vance and other senior administration officials planned a meeting with the American Petroleum Institute later in the week.
Shifts in regional exports and output
In Iraq, the North Oil Company said exports from the Kirkuk fields to Turkey’s Mediterranean port of Ceyhan had resumed by pipeline after Baghdad and the Kurdistan Regional Government agreed to restart flows. The North Oil Company indicated an initial capacity of 250,000 barrels per day for those resumed shipments. Separately, Iraq’s state oil marketing body, SOMO, signed contracts with international carriers and buyers to export crude oil via Turkey, Jordan and Syria, the Iraqi state news agency reported.
Market commentators noted the timing of Iraq’s resumed flows. "Iraq turning the taps back on comes at just the right time, when the world really needs more oil supplies. It also ramps up the pressure on Iran, making it harder for them to use oil as a bargaining chip," said Phil Flynn, senior analyst at Price Futures Group.
Libya’s National Oil Corporation reported that flows from the Sharara oilfield were being gradually rerouted through alternative pipelines after a fire at the field.
U.S. stocks and inventories
Domestic energy stock data showed divergent movements in recent weeks. The U.S. Energy Information Administration reported that crude inventories rose by 6.2 million barrels to 449.3 million barrels in the week ended March 13, a much larger build than market expectations for an increase of 383,000 barrels. At the same time, gasoline and distillate inventories declined.
Market outlook and immediate drivers
Traders and analysts emphasized that the market reaction reflected both immediate physical risks to Middle Eastern infrastructure and the knock-on effects in shipping and refined product markets. The combination of substantial reported output cuts in the region, resumed flows from some producers, and targeted policy moves aimed at the U.S. market has left global benchmarks sensitive to further developments.