Brent Trades Above $100 as Hormuz Closure Keeps Risk Premium Elevated
Brent crude traded above $100 a barrel after one of the most volatile weeks in recent memory, as investors braced for further disruption following Iran’s pledge to keep the Strait of Hormuz effectively shut. The global benchmark swung in Friday trading after a 9.2% jump in the prior session, while WTI hovered near $97 following dramatic intraday ranges throughout the week.
Supply-risk pricing remains anchored to physical flows. In his first public remarks since succeeding his father, Iran’s new supreme leader, Mojtaba Khamenei, said Tehran would seek to ensure the strategic waterway for crude and natural gas stays closed. The near-standstill in shipping through the narrow strait has choked off shipments of crude, natural gas, and products such as diesel to global customers, pushing up energy prices and reviving fears of an inflation shock that is beginning to weigh on some economies.
US measures aimed at calming the market have so far struggled to offset the core disruption. Washington issued a second temporary waiver allowing the purchase of Russian oil, covering cargoes loaded onto vessels before March 12. The move is broader than an earlier directive this month that effectively cleared only India to increase buying, but it remains confined to oil already in transit and does not resolve bottlenecks tied to Hormuz.
The International Energy Agency warned on Thursday that the disruption is the largest in the history of the global oil market, a day after its members agreed to a historic release of emergency reserves to cool prices. Market participants have argued that emergency stock releases may cap the upside in the near term, but likely only briefly if navigation through Hormuz remains impaired. US President Donald Trump also struck a defiant tone, offering little reassurance to energy markets as the war nears its third week.
Maritime security risks are adding to the premium. Media reports cited US officials as saying Iran has begun laying mines in the Strait of Hormuz, increasing the danger for vessels considering passage. Since the war began on Feb. 28, traffic through the channel has slowed to a trickle. US Energy Secretary Chris Wright said the Navy could begin escorting tankers through the strait by the end of March, though an earlier claim of a successful escort that appeared in a now-deleted post was later walked back by the White House.
Volatility has been amplified by financial positioning. WTI traded in a roughly $43 range this week—its widest since the depths of the pandemic when prices briefly turned negative—while Brent swung about $38, with flows from options markets to exchange-traded funds exacerbating the moves. One money manager said volatility is likely to remain elevated until there is clarity on flows through Hormuz, with an $85–$105 range seen as plausible while the conflict remains unresolved.
By 3:23 p.m. in Singapore, Brent for May settlement rose 1.3% to $101.72 a barrel, while WTI for April delivery gained 1.2% to $96.89. Markets will continue to track navigational conditions in Hormuz, signs of mine-related risks and escort capacity, and whether emergency stock releases can meaningfully cushion the supply shock and its inflation spillover.
Source : Newsmaker.id
