Oil jumps over 3% as widening Iran conflict threatens Middle East supplies
TOKYO/SINGAPORE, March 5 — Oil prices rose more than 3% on Thursday, extending a multi-day rally as the escalating conflict involving the United States, Israel and Iran heightened fears of prolonged disruptions to critical
Middle East energy supplies, particularly shipments passing through the Strait of Hormuz.Brent crude climbed $2.65, or 3.26%, to $83.99 per barrel by 0520 GMT, marking its fifth consecutive session of gains. U.S. West Texas Intermediate crude rose $2.76, or 3.70%, to $77.42.
Analysts said crude markets remained on edge as military escalation in the region increased risks to oil and gas flows from some of the world’s largest energy producers. ANZ analysts said concerns were focused on supply moving through the Strait of Hormuz, a key transit route for Gulf exports.Conflict escalation raises supply risksThe latest market move followed a wave of Iranian missile strikes on Israel early on Thursday, which forced millions of residents into bomb shelters as the conflict entered its sixth day.The escalation came hours after efforts in Washington to halt the U.S. air assault were blocked in the Senate.
On Wednesday, a U.S. submarine sank an Iranian warship off Sri Lanka, killing at least 80 people, while NATO air defences intercepted an Iranian ballistic missile fired towards Turkey.Maritime security concerns have also intensified. Iranian forces have struck oil tankers in or near the Strait of Hormuz, while explosions were reported near a tanker off Kuwait, according to the United Kingdom Maritime Trade Operations.Shipping disruptions and halted exportsEnergy flows from the Gulf have been increasingly disrupted as the conflict deepens.Around 200 ships including oil, liquefied natural gas and cargo vessels remained anchored in open waters off major Gulf producers such as Iraq, Saudi Arabia and Qatar, estimates based on MarineTraffic ship-tracking data.Iraq, the second-largest crude producer in the Organization of the Petroleum Exporting Countries, has cut output by nearly 1.5 million barrels per day due to limited storage and the lack of a viable export route .Qatar, the world’s largest exporter of liquefied natural gas, declared force majeure on gas exports on Wednesday, with sources indicating it may take at least a month to restore normal production volumes.Traders expect sustained price pressureOil traders said the market outlook remained bullish as prospects for a quick diplomatic resolution appeared limited.Growing risks to Middle East shipping lanes and production facilities have reinforced expectations that supply constraints could tighten global energy markets in the near term.
