Oil Rises, China Curbs Exports and Market Tightens
Oil prices continued their rally on Thursday (March 5th) as the escalation of the US-Israel war with Iran continued to disrupt energy supplies and shipping flows. Brent rose 2.8% to US$83.65 per barrel, while WTI strengthened 3.4% to US$77.22 in the New York morning session.
The market is increasingly assessing a tightening oil balance. The Chinese government reportedly asked major refineries to suspend diesel and gasoline exports, while European diesel prices hit their highest levels since 2022—signaling that supply pressures are starting to spread to refined products.
The main risk remains the Strait of Hormuz. Ship tracking data cited by Reuters shows around 300 tankers remain in the strait, with traffic in and out of the strait virtually halted. Attacks on tankers and reports of explosions near ships off Kuwait have added a risk premium to prices and worsened shipping sentiment.
Physical disruptions have also hit production. Iraqi officials said output has been cut by nearly 1.5 million barrels per day due to storage and export channel constraints, while Qatar declared force majeure on LNG exports, and sources assessed that volumes could take at least a month to normalize.
Going forward, the market will monitor evidence of Hormuz traffic recovery, the dynamics of insurance and freight costs, and the extent of ongoing output cuts at major producers. As long as logistical and production constraints remain unabated, oil volatility could remain high despite efforts to stabilize energy flows.
Source: Newsmaker.id
