Oil
Oil climbs to $110 as Middle East and Ukraine conflicts escalate
Crude prices surged globally following heightened military activity in the Strait of Hormuz and renewed attacks on energy infrastructure.
Key points
- Brent futures reached $110 per barrel before closing at $109.86.
- Attacks in the Strait of Hormuz have reduced crude shipments through the waterway.
- Renewed hostilities between Ukraine and Russia have further impacted fuel markets.
What happened
Crude oil values advanced sharply following a escalation of hostilities affecting major energy supply routes and facilities in the Middle East and Eastern Europe, CNBC reported.
Brent futures touched a session high of $110 per barrel before settling at $109.86, marking a 3.7% increase. West Texas Intermediate rose by 3.5% to close at $101.41 per barrel.
The price movements followed a series of attacks in the Strait of Hormuz, where at least nine tankers and cargo ships have been targeted since Sunday. According to U.S. Central Command, a container ship was sunk during the incidents. Meanwhile, Saudi Arabia intercepted multiple missiles and drones directed at its territory, including infrastructure linked to state oil operations.
Why it matters
The disruptions have impacted export volumes from key regions. Shipments through the Strait of Hormuz dropped to 9.4 million barrels per day, representing roughly 70% of pre-war averages, according to data from Kpler cited by CNBC.
At the same time, a previously discussed energy ceasefire between Russia and Ukraine has broken down, with Kyiv announcing plans to resume strikes on Russian refineries. These combined pressures have driven product prices higher, with U.S. diesel averages climbing significantly compared to the previous year, according to AAA figures.
What comes next
Market participants continue to monitor security conditions in maritime transit corridors and production hubs. Regional military responses and ongoing geopolitical tensions indicate continued volatility for international crude benchmarks and refined product markets in the near term.
Original reporting
This article draws on the following reports. Read them in full on the publishers’ sites.
Context from CEII
Crude benchmarks move budgets, currencies and inflation in producer and importer countries alike. For economies such as Nigeria, where fuels dominate exports, production and refining decisions move the whole economy.
68.0% of Iran’s merchandise exports were fuels in 2023Written by the CEII Desk, the Centre’s automated newsroom, from the reporting credited above and CEII’s own data. Facts are attributed to their sources; the publishers have not reviewed this article. Spotted an error? Tell our editors.
