U.S. Oil Posts Biggest Weekly Gain Ever as Iran War Rages On
U.S. crude notched its biggest weekly gain on record as the war in Iran upended critical energy flows, with commercial shipping through the Strait of Hormuz described as near-totally halted.
On Friday, West Texas Intermediate (WTI) jumped 12% to settle just below $91 a barrel, marking the largest one-day gain in nearly six years. Brent closed near $93 a barrel. Bullish momentum was further fueled after Iran warned the European Union could be a “legitimate” target if it joins the war.
Signs of real supply strain are emerging across the region. The Wall Street Journal reported Kuwait has started cutting production at some fields after running out of storage for trapped crude. Citigroup estimates the market is losing 7 million to 11 million barrels per day of supply due to disruption through Hormuz.
Prices surged even after President Donald Trump signaled “imminent action” to reduce pressure on energy prices, while National Economic Council Director Kevin Hassett denied the White House would tap the Strategic Petroleum Reserve (SPR) anytime soon. “We’ve got a whole flow chart of tools to use,” Hassett said.
So far, the U.S. Treasury has eased curbs on India’s ability to buy Russian oil, and the U.S. International Development Finance Corporation announced a $20 billion maritime reinsurance plan in the Gulf, including war-risk coverage. Japan was also reported to be considering using national reserves, with markets speculating a coordinated emergency stock release by multiple nations could be deployed to maximize impact.
Still, with no sign of de-escalation, Goldman Sachs flagged the risk of scenarios where oil tops $100 a barrel if the disruption is prolonged. European diesel futures headed for a weekly gain of more than 50%, and central banks signaled unease about a possible resurgence in inflation.
The Joint Maritime Information Center (JMIC) said there has been a “near-total” pause in commercial traffic through Hormuz, citing “security threats, insurance constraints, operational uncertainty and effective disruptions.” Freight markets have been hit hard as well: some shippers are booking smaller vessels to move crude from the U.S. Gulf Coast to Asia as costs soar for the large tankers typically used. Only nine empty VLCCs reportedly remain available for floating storage for major Middle East producers—once filled, onshore tanks could tighten rapidly.
The conflict has drawn in about a dozen nations since the U.S. and Israel launched their campaign on Feb. 28. As fighting intensified, shipping through Hormuz all but stopped, and some producers began curbing output. Refineries and tankers have also been hit. Qatar’s energy minister told the Financial Times that crude could surge to $150 a barrel within two to three weeks if tankers and merchant vessels can’t transit Hormuz.
The International Energy Agency estimates roughly 20 million barrels per day of oil and petroleum products typically flow through Hormuz. With importers struggling to secure barrels, the U.S. Treasury’s OFAC issued a short-term waiver to allow India to buy Russian crude—limited to transactions involving oil already stranded at sea, according to Treasury Secretary Scott Bessent. Indian refiners have reportedly already bought more than 10 million barrels of Russian crude, and Reliance Industries is said to be seeking additional supplies.
Goldman Sachs noted that a prolonged disruption at Hormuz could lift prices much higher, though its current base case assumes a gradual recovery in shipments and futures averaging around $76 a barrel in the second quarter. Still, the bank said that if flows remain very low for several more weeks, Brent could cross $100.
In Asia, signs of strain are mounting: China has reportedly told major refiners to suspend diesel and gasoline exports to prioritize domestic needs, while Japanese refiners have asked their government to release oil from strategic reserves.
WTI (April) +12% to $90.90 a barrel (New York). Brent (May) +8.5% to $92.69 a barrel.
Source : Newsmaker.id
