Oil Rally Continues, Output Cuts and Tankers Held
Oil prices continued to strengthen on Thursday (March 5th) as the escalation of the US-Israel war with Iran continued to disrupt supplies and raise concerns over energy flows in the Strait of Hormuz. Brent was last at US$83.76 per barrel (around +1.5%), while WTI was hovering around US$76.9 per barrel (around +3.0%).
The market believes the tightening is not limited to crude but is beginning to spread to refined products. Reuters reported that the Chinese government has asked major refineries to suspend diesel and gasoline exports, while European diesel contracts surged to their highest levels since 2022—indicating a tight refined fuels market as logistical risks mount.
The primary focus remains on the Strait of Hormuz after shipping traffic in and out of the chokepoint came to a near-halt and reports of attacks and incidents surrounding tanker routes emerged. Uncertainty over shipping security and insurance/freight costs have kept risk premiums high, forcing some market participants to recalculate near-term supply availability.
Disruptions are also beginning to reshape the production landscape. Iraqi officials said output was cut by about 1.5 million barrels per day due to limited storage and export routes, while Qatar declared force majeure on LNG exports—adding to the risk of tight energy supplies if normalization takes longer.
Going forward, the market will monitor evidence of tanker traffic recovery in Hormuz, the stability of the region's energy infrastructure, and the extent to which Iraq's output cuts and Qatar's LNG disruptions persist. As long as these physical indicators remain unchanged, oil volatility could remain high despite the de-escalation headlines.
Source: Newsmaker.id
