Key Points
- Brent crude rose $1.67, or 2.05%, to $83.07 per barrel, while U.S. West Texas Intermediate gained $1.94, or 2.60%, to $76.60.
- Shipping through the Strait of Hormuz has nearly halted for the fifth day, with about 329 oil vessels stuck in the Gulf.
- Iraq cut output by nearly 1.5 million barrels a day, while Qatar declared force majeure on gas exports, potentially disrupting energy supply for at least a month.
Oil prices pushed higher on Thursday as the widening conflict between the United States and Iran continued to disrupt flows through the Middle East. Brent crude rose $1.67, or 2.05%, to $83.07 per barrel by 0141 GMT, while U.S. West Texas Intermediate climbed $1.94, or 2.60%, to $76.60.
The move reflects growing anxiety in the energy market after shipping through the Strait of Hormuz, one of the world’s most critical energy corridors, slowed to a near halt.
The route normally carries close to one-fifth of global energy consumption, which makes even short disruptions highly sensitive for traders and governments.
Markets also reacted to the expansion of the U.S.–Iran war. On Wednesday, a U.S. strike hit an Iranian warship off Sri Lanka, and U.S. Senate Republicans voted against a bipartisan resolution that aimed to stop the air war and require Congress to authorise hostilities.
This political backing signals that the military campaign could continue in the near term.
If tensions persist, traders may continue to price a geopolitical premium into crude. However, the market still watches how long the disruption lasts. Short conflicts often lead to fast spikes that fade once shipping resumes.
Hormuz Blockage Creates Immediate Supply Bottleneck
Shipping through the Strait of Hormuz has ground to a near halt for the fifth day, creating a sudden bottleneck for energy exports. J.P. Morgan estimates that about 329 oil vessels are stuck in the Gulf, unable to safely move cargo through the narrow channel.
Security concerns remain high after Britain’s maritime trade operations agency reported a large explosion heard and seen by the master of a tanker anchored 30 nautical miles southeast of Kuwait’s Mubarak Al Kabeer. A small craft was later seen leaving the area, adding to fears that commercial vessels may become targets.
Even though Iran has avoided striking most major energy infrastructure so far, shipping risk remains elevated. Traders often respond to such risks by bidding up crude futures to secure supply, which partly explains the current rally.
If the blockage continues, refiners in Asia and Europe may face delayed shipments. That scenario could tighten physical markets and push prices further upward in the short term. If naval patrols reopen the route quickly, price pressure may ease.
Production Cuts Compound Supply Pressure
At the same time, production disruptions across the region have reduced the buffer normally available during geopolitical crises.
Iraq, the second-largest crude producer in OPEC, has cut output by nearly 1.5 million barrels a day due to storage shortages and the lack of a viable export route. With exports constrained, producers cannot move crude even if wells remain operational.
Meanwhile, Qatar declared force majeure on gas exports, with sources indicating that a return to normal production volumes may take at least a month. Qatar remains the largest liquefied natural gas producer in the Gulf, so any prolonged halt may tighten global gas markets as well.
These developments arrive at a time when energy inventories in several regions already sit near seasonal averages. Reduced output combined with blocked shipping could create short-term shortages in some markets, which would support oil prices if the situation drags on.
Technical Analysis
WTI crude oil (CL-OIL) is trading near $76.97, up around 1.17%, extending the strong upward momentum that has been building since the December low near $54.87. The daily chart shows a clear bullish trend, with price continuing to print higher highs and higher lows while accelerating into the upper range of the recent rally.
From a technical perspective, price is trading well above its key moving averages. The 5-day moving average (73.22) and 10-day (69.57) are rising sharply, while the 20-day (66.77) and 30-day (65.61) remain significantly below the current price level.
This widening spread between price and the longer-term averages reflects strong bullish momentum following the breakout above the $70 area.
Immediate resistance is seen around $77.50–$78.00, where the latest rally is approaching a short-term ceiling. A sustained break above this zone could open the path toward $79.80–$80.00, a key psychological and technical level.
On the downside, initial support is located near $73.00–$74.00, followed by stronger structural support around $70.00, where the short-term moving averages are clustered.
Overall, the trend remains constructive while prices hold above the $73–$74 region, though the sharp upward move may invite periods of consolidation before the next directional push.
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Frequently Asked Questions (FAQs)
- Why Did Oil Prices Rise Today?
Oil rose because traders priced in supply risk from the U.S.–Iran war and the shipping slowdown through the Strait of Hormuz. Brent moved up $1.67, or 2.05%, to $83.07 per barrel, while WTI rose $1.94, or 2.60%, to $76.60. When a key export corridor slows, markets often pay more for near term supply. - How Important is the Strait of Hormuz to Global Energy Supply?
The Strait of Hormuz matters because it acts as a core pipeline for energy trade. It serves as a key conduit for nearly a fifth of global energy consumption. If shipping “nearly halts” for multiple days, buyers may face delays, and prices can rise fast as refiners compete for cargoes. - What Does It Mean That Shipping Has Nearly Halted for the Fifth Day?
It means fewer tankers can move oil and fuel out of the Gulf on schedule. J.P. Morgan estimates about 329 oil vessels are stuck in the Gulf, which suggests a growing queue of delayed shipments. If this lasts, spot prices and freight costs can rise, and volatility often increases. - How Do Iraq’s Output Cuts Affect Oil Prices?
Iraq cutting output reduces available supply in a market already dealing with logistics risk. Officials said Iraq cut output by nearly 1.5 million barrels a day due to limited storage and export routes. Less supply can tighten prompt crude balances and keep prices supported if demand stays steady. - What Does Qatar Declaring Force Majeure Mean for Energy Markets?
Force majeure means Qatar says it cannot meet some contract obligations due to circumstances outside its control. Qatar, the biggest LNG producer in the Gulf, declared force majeure on gas exports, and sources said normal production volumes may take at least a month to return. That can tighten LNG supply and sometimes lifts crude sentiment too, since fuel markets are linked.
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