Hormuz Heats Up, Oil Jumps Sharply
Benign oil prices surged on Tuesday (March 3), posting their third consecutive session of gains, as the US-Israel conflict with Iran escalated and fueled concerns about energy supply disruptions in the Middle East.
Brent rose about 7.8% to $83.79 per barrel after briefly touching $85.12, its highest level since July 2024. WTI rose about 7.5% to $76.54 after reaching $77.58—and since Friday's close, the cumulative rally between Brent and WTI has reached the tens of percent range.
The market primarily added a risk premium to shipping lanes: incidents involving tankers and threats in the Strait of Hormuz prompted ships to avoid the route, after insurance coverage in the region was removed and shipping costs soared. This chokepoint is crucial for global oil and LNG flows, so any escalation is quickly reflected in prices.
On the supply side, shutdowns and disruptions at several regional oil and gas facilities heightened the risk of near-term tightness, while the market also pushed up refined product and gas prices. Market participants' focus is now on shipping stability, the operational status of key facilities, and any potential signs of further escalation—which will maintain an upward price bias in the coming days.
Source: Newsmaker.id
