Key Takeaways
- Brent crude crossed $101/barrel threshold Thursday, settling near $98 with a 6.6% daily gain
- Iraqi waters saw two tanker strikes in the Persian Gulf, resulting in at least one fatality
- Oman ordered complete vessel evacuation from Mina Al Fahal terminal as safety measure
- China implemented ban on refined petroleum exports throughout March
- IEA unveiled historic 400 million barrel emergency reserve deployment to stabilize markets
Thursday witnessed another dramatic spike in petroleum markets as fresh assaults on shipping vessels and terminal shutdowns intensified concerns over Middle Eastern supply stability.
Brent crude peaked at $101.59 per barrel during early trading before retreating to approximately $98. West Texas Intermediate climbed more than 6% to reach $92.61. Both crude benchmarks had previously approached $120 levels earlier in the week.
Two petroleum tankers sustained damage in northern Persian Gulf waters under Iraqi jurisdiction. Footage circulating on social media depicted the ships engulfed in flames. Iraqi port authority director Farhan al-Fartousi confirmed to The Wall Street Journal that the incident claimed one sailor’s life while emergency responders worked to extract remaining crew members. Baghdad immediately suspended operations at all petroleum export facilities following the assault.
Separately, Oman mandated the evacuation of all vessels from its Mina Al Fahal export facility as a protective measure following the series of regional maritime attacks. This terminal represents one of the limited remaining channels for Middle Eastern petroleum to access international markets. Normal operations resumed later in the day.
The Strait of Hormuz, accounting for approximately 20% of worldwide petroleum transit, remains virtually impassable. Tehran has declared no crude shipments will traverse the waterway. This blockade has compelled Gulf nations including Iraq, Kuwait, and Saudi Arabia to reduce production levels.
Beijing Restricts Petroleum Product Exports
China declared an immediate prohibition on refined petroleum product exports effective March. Chinese refineries simultaneously began voiding previously negotiated gasoline and diesel shipment agreements. The nation’s leading processors had already received instructions to halt new export contract negotiations.
Goldman Sachs cautioned that oil prices might surpass the 2008 record of $147.50 per barrel should Hormuz restrictions persist through March.
ANZ market analysts suggested markets continue to underestimate the probable length of supply interruptions. “When conflicts extend beyond initial shock phases, petroleum markets typically transition from uncertainty pricing to endurance pricing,” their analysis noted.
Strategic Reserve Deployments Cap Further Price Advances
The International Energy Agency is orchestrating an unprecedented 400 million barrel release from emergency stockpiles. U.S. President Donald Trump announced Wednesday that America would deploy 172 million barrels from its Strategic Petroleum Reserve.
However, Sanford C. Bernstein analyst Neil Beveridge emphasized that reserve releases were “insignificant compared with the 20 million barrels” daily lost due to the Hormuz shutdown.
The regional conflict reached its thirteenth consecutive day Thursday without resolution prospects. Tehran stated any ceasefire arrangement would necessitate assurances from both Washington and Jerusalem against additional Iranian strikes. The United States has not accepted these conditions.
Speaking to supporters in Kentucky Wednesday, Trump predicted the conflict would conclude shortly, though he noted America “would stay as long as it takes.”
Wednesday’s U.S. petroleum inventory report revealed an unexpectedly large 3.8 million barrel increase during the previous week.
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