LONDON, March 6 - Global crude prices surged through the week, marking their most pronounced weekly rise since the outbreak of Russia’s full-scale war in February 2022, as a conflict in the Middle East disrupted shipments and energy exports transiting the vital Strait of Hormuz.
Brent crude futures climbed roughly 20% over the week, while West Texas Intermediate advanced about 25%. On Friday morning Brent continued its ascent, trading up $2.09, or 2.45%, at $87.50 per barrel at 0953 GMT. WTI added $3.76, or 4.64%, to reach $84.77. Both contracts were trading at their highest levels since July 2024.
Market attention intensified after the United States and Israel carried out strikes on Iran on Saturday. In response, Tehran halted tankers transiting the Strait of Hormuz - a chokepoint that handles roughly one-fifth of global daily oil flows - contributing to a sharp tightening of available seaborne supply.
The unrest has spread through parts of the Middle East that are crucial to global energy production, leading to reduced output and the temporary closure of refineries and liquefied natural gas facilities in affected areas.
Qatar’s energy minister told the Financial Times that he expected all Gulf energy producers to cease exports within weeks, a development he said could push oil as high as $150 a barrel, according to an interview published on Friday.
"With every passing day, halted activities in Hormuz will have two major impacts on oil: the inability to store 20 million barrels per day and the lack of flow to the world, which could drive global energy prices higher," said Priyanka Sachdeva, senior market analyst at Phillip Nova.
U.S. President Donald Trump said in an exclusive interview that he was not worried about rising U.S. gasoline prices tied to the conflict, stating "if they rise, they rise" and saying the U.S. military operation was his priority.
A White House official indicated that the U.S. Treasury Department was expected to unveil measures intended to counter rising energy prices stemming from the conflict, a possibility that briefly drove oil prices down by more than 1% earlier on Friday. Price declines narrowed after a report indicated the administration had, for now, ruled out using the Treasury to trade oil futures.
To alleviate supply strains that have forced some Asian refineries to cut processing, the Treasury on Thursday granted waivers allowing companies to purchase sanctioned Russian oil that was stored on tankers. The initial waivers were issued to Indian refiners, which have since bought millions of barrels of Russian crude, reversing months of pressure on them to stop such purchases.
Ship-tracking firm Kpler estimated that around 30 million barrels of Russian oil are currently available and loaded on vessels in the Indian Ocean, Arabian Sea region and Singapore Strait, including volumes held in floating storage.
Despite the recent sharp upward move in prices, some analysts caution that the rise remains modest in a broader historical context. "It’s important to put this move into perspective: despite crude’s almost 20% surge this month, the price is currently just $3.40 above its average over the last four years," noted Tony Sycamore, an analyst at IG.
Market implications
- Disrupted flows through the Strait of Hormuz have tightened physical supply and pressured shipping routes for seaborne crude.
- Refinery and LNG plant shutdowns across the region have compounded supply constraints, with spillover effects on refined fuel markets and natural gas-linked pricing.
- Policy responses and emergency measures by governments and treasuries are influencing short-term price volatility.