Global crude oil prices are on track to register the biggest weekly surge in four years as the war in the Middle East has unleashed a wave of disruption across energy markets, with maritime traffic in the Strait of Hormuz grinding to a near-complete halt, which has kept crude oil prices in a boiling zone.
Brent crude futures have already jumped 22% this week so far, putting them on track for the biggest weekly surge since February 2022, when they gained 25.4%. Oil markets have been rocked by the conflict, which has engulfed about a dozen nations since the United States and Israel launched their campaign on 28 February.
To be precise, prices have been marching higher since late December and have strengthened by 50% so far.
The last time Brent showed a similar rally was between November 2021 and March 2022, when it jumped 68.5% in just five months. At the start of the Russia–Ukraine war in 2022, Brent crude topped $139 per barrel. As per available data, it touched a peak of $148 in July 2008 before crashing to $36.
The ongoing US–Iran conflict has led to the closure of the Strait of Hormuz, disrupting energy flows to global markets and prompting producers to begin shutting in output.
Day 7 of Middle East conflict
Tensions in the Middle East show no signs of abating, as both the US-Israel alliance and Iran announced they would continue attacking each other, indicating the possibility of further bloodshed in the region.
The latest reports indicate that over 1,332 people have already died on Iranian soil, while dozens have been killed elsewhere in the region in retaliatory strikes, Bloomberg reported.
As the war entered its seventh day on 6 March, Iran continued targeting US military bases and energy infrastructure across the Gulf region, reportedly damaging the Bahrain Petroleum Company refinery on Thursday.
Earlier this week, Iran attacked QatarEnergy LNG, Qatar’s primary LNG facility that handles about 82 mmtpa of LNG, nearly 25% of global LNG supply, forcing it to halt output and sending prices soaring. Prior to this, a drone strike reportedly targeted the Ras Tanura Refinery in Saudi Arabia.
Iranian Foreign Minister Abbas Araghchi told NBC News that his country had no intention of negotiating and was prepared for a ground invasion, although US President Donald Trump later told the same network that he was not considering such a move.
Trump said Iran was being demolished “ahead of schedule and at levels people have never seen before,” claiming the country now has “no air force and no air defense,” adding that its air force is “gone.”
Israeli jets have reportedly bombed southern and eastern Lebanese towns, including Douris, as well as targeted the southern suburbs of the capital, Beirut. Israeli forces have also targeted underground missile facilities in Tehran.
How long can crude oil continue to boil?
Goldman Sachs warned that a prolonged disruption at the Strait of Hormuz, which links the Persian Gulf to global markets and typically carries about one-fifth of global oil flows, could push prices significantly higher, flagging the risk of oil topping $100 per barrel if disruptions persist.
Qatar’s energy minister told the Financial Times that crude prices could soar to $150 a barrel within two to three weeks if tankers and other merchant vessels remain unable to pass through Hormuz.
Trump told Reuters that he is not looking to tap the nation’s Strategic Petroleum Reserve, the world’s largest stockpile of emergency oil stored in underground salt caverns in Louisiana and Texas.
Meanwhile, to help cool prices, the US has allowed India to temporarily increase its purchases of Russian oil, which had earlier been put on hold due to pressure from the White House. On the other hand, Saudi Arabia raised oil prices for Asian buyers and redirected shipments through Red Sea ports to bypass the Strait of Hormuz.
(With inputs from Bloomberg)
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