Brent Crudes Past US$100, Shipping Disruptions and China Export Tightening
Brent prices surged again past US$100 per barrel after the Iran conflict triggered greater shipping turmoil in the Middle East, while China tightened fuel export restrictions to cushion the impact of the conflict. Brent briefly rose as much as 10% to US$101.59 per barrel, and WTI approached US$96, indicating that the supply risk premium was once again dominating trading.
Logistics risks increased after Oman evacuated all ships from its main export terminal outside the Strait of Hormuz and two tankers were reportedly attacked in Iraqi waters. These developments overshadowed the IEA's reserve release measures aimed at cooling prices, as the market focused more on evidence of physical disruptions and the security of supply lines.
Pressure is also emerging from regional demand and export policies. Chinese refineries have begun canceling previously agreed-upon export cargoes of refined products, including gasoline and diesel. Major refiners were reportedly asked last week to halt signing new contracts, and this latest directive is seen as a further tightening of previous guidance.
The crucial Strait of Hormuz remains closed, prompting major Gulf producers to cut production. The impact extends to natural gas and products like diesel, amid extreme price swings in the past week. Goldman Sachs warned that oil could surpass its 2008 peak if flows through Hormuz remain depressed into March, while Sanford C. Bernstein considered the reopening of Hormuz to be the most crucial factor in price normalization.
On the policy front, the IEA is said to be preparing a coordinated release of 400 million barrels, with the US planning to release 172 million barrels as part of a global effort to contain price increases. However, some market participants question the effectiveness of such a move if daily supply disruptions from the Hormuz closure remain significant. Rhetoric has also hardened, with Iran stating that a ceasefire requires guarantees from the US and Israel not to attack in the future—conditions Washington finds difficult to accept—while US President Donald Trump reiterated that the war is coming to an end but hinted that the US will stay in place as long as necessary.
At 12:46 p.m. in Singapore, Brent crude for May delivery rose 9.3% to US$100.54 per barrel, while WTI crude for April delivery rose 8.7% to US$94.85 per barrel. (alg)
Source: Newsmaker.id
