Hormuz Becomes More Dangerous, Oil Ignores Rising US Stockpiles
Oil prices closed nearly 5% higher on Wednesday (March 11) after new attacks on ships in the Strait of Hormuz exacerbated concerns about supply disruptions. Brent rose $4.18, or 4.8%, to settle at $91.98 per barrel, while WTI gained $3.80, or 4.6%, to $87.25 per barrel.
Maritime security and risk firms reported three additional vessels were hit by projectiles in Hormuz, bringing the number of vessels attacked since the Iran war began to at least 14. Shipping traffic in the narrow waterway has been virtually halted since the US and Israel began attacks on February 28, halting exports of about a fifth of global oil supply and pushing prices back to their highest levels since 2022.
On the policy front, President Donald Trump stated that the US is ready to escort tankers if needed, but sources said the US Navy rejected the shipping industry's request for military escorts because the risk of attack remains too high. Uncertainty about when and how normal flows will be restored has kept the supply risk premium persistent.
The International Energy Agency (IEA) has recommended releasing 400 million barrels of oil reserves—the largest in its history—to stem price increases that have exceeded 25% since the war. However, analysts believe this volume remains inadequate if supply disruptions persist; Macquarie calculates it is equivalent to roughly four days of global production and about 16 days of the oil volume that typically flows through the Gulf.
Oil prices also tended to shrug off a US government report showing a larger-than-expected rise in crude inventories last week. Conversely, a deeper-than-expected decline in gasoline and distillate (including diesel and aviation fuel) stocks reinforced signs of tightening on the refined product side, keeping the market sensitive to news of escalation in Hormuz and further supply risks.
Source: Newsmaker.id
