International oil prices surged above $110 per barrel as key shipping lanes were almost completely shut down, more major oil-producing countries cut production, and the United States threatened to escalate the conflict that has already disrupted energy markets.
News on March 9: International oil prices surged above $110 per barrel as a key shipping lane was almost completely shut down, more major oil-producing countries cut production, and the United States threatened to escalate the conflict that has already disrupted energy markets. On Monday, Brent crude futures soared 20% to $111.04 per barrel, while WTI crude futures surged 22%. As of the time of writing, $Brent Last Day Financial Futures (MAY6) (BZmain.US)$ up over 15%, trading at $107.10 per barrel; $Crude Oil Futures (APR6) (CLmain.US)$ up 17.4%, trading at $106.72 per barrel.
Meanwhile, the three major U.S. stock index futures all declined. As of this writing, the Dow Jones futures fell by 1.78%, while the S&P 500 and Nasdaq 100 futures were down 1.6%.
More than a week after the United States and Israel launched airstrikes on Iran, there are no signs of easing in the Middle East conflict. Disruptions to shipments through the Strait of Hormuz—a narrow waterway that typically handles one-fifth of the world's oil—and attacks on energy infrastructure have driven up crude oil and natural gas prices. Meanwhile, storage facilities in the Middle East are rapidly filling up, with the UAE and Kuwait beginning to cut production. Iraq also started halting production last week.
Andy Lipow, president of Lipow Oil Associates, a petroleum industry and market consultancy, said: “As the conflict continues, the psychological threshold of $100 per barrel may only be a short-term target on the way to higher levels, as tankers unable to load have led to filled storage tanks, which in turn suppresses production.”
In response to the surge in oil prices, U.S. President Trump tweeted that oil prices would quickly drop once the Iranian nuclear threat was eliminated—and that the cost would be negligible for both the United States and the world in exchange for security and peace. Only a fool would hold a different view!
Currently, more than a dozen countries have been drawn into the conflict, which has sparked market concerns about an inflation crisis. U.S. retail gasoline prices have jumped to their highest level since August 2024, posing a significant challenge to President Trump and his Republican Party ahead of midterm elections later this year.
Despite this, Trump is continuing the war effort. Earlier Saturday, he stated on social media that the U.S. would consider striking previously untargeted areas and groups within Iran. This statement followed a vow by Iranian President Pezeshkian not to back down.
According to reports, the Israeli military attacked multiple fuel storage facilities in Tehran, Iran’s capital, on March 7. Based on available information, this marked the first time civilian energy infrastructure in Iran had been targeted since the U.S. and Israel launched military strikes against Iran on February 28. In retaliation, Iran's Islamic Revolutionary Guard Corps fired missiles at oil facilities located in Haifa, Israel.
Over the weekend, more key energy infrastructure came under threat as Saudi Arabia intercepted and destroyed drones heading toward the Shaybah oilfield, which produces 1 million barrels per day. Last week, Saudi Arabia was forced to halt operations at its largest refinery, the Ras Tanura refinery, and sought to divert some crude oil exports to its Red Sea ports following the closure of the Strait of Hormuz.
The rise in energy prices, including products like diesel, is spreading across markets. For example, South Korea is considering whether to implement its first-ever price cap on oil in 30 years. Additionally, signs of recent supply tightness are evident as the prompt spread for Brent crude — the difference between the two nearest contracts — widened to over $8.24 per barrel in backwardation, a bullish pattern far exceeding the 62-cent spread seen just a month earlier.
As time progresses, several international investment banks have also raised their forecasts for oil prices. Barclays previously stated that if there were a substantial supply disruption, Brent crude could rise to around $80 per barrel. However, just days later, amid escalating tensions, Barclays further warned that if the Middle East conflict persists for several more weeks, Brent crude could test $120 per barrel. The bank added: “These figures may seem excessively high, but we reiterate that the current fundamentals are stronger, and the risks are greater than during the Russia-Ukraine conflict — when we witnessed oil prices reaching these levels.”
The Qatari Energy Minister and research firm Macquarie provided an even more ‘extreme’ scenario. On March 6, the Qatari Energy Minister issued a stern warning that the Middle East conflict would force the Gulf region to halt energy exports within weeks. Even if the conflict ended immediately, Qatar would need ‘weeks to months’ to return to normal delivery schedules. He projected that crude oil prices could surge to $150 per barrel within two to three weeks. Vikas Dwivedi, Global Energy Strategist at Macquarie, echoed this view, stating that a closure of the Strait of Hormuz for several weeks would trigger a chain reaction, potentially pushing crude oil prices to $150 per barrel or even higher.
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