(WO) – Oil futures extended gains as the U.S.-Iran conflict widens and energy infrastructure across the Middle East comes under attack, according to Sasha Foss, Energy Analyst at CSC Commodities, a division of Marex. Front-month Brent crude rose $5.66/b to $83.40, with the prompt spread widening to $2.65/b, reflecting tightening near-term supply conditions.
Foss said the biggest risks to global oil markets are additional strikes on regional energy infrastructure and the continued closure of the Strait of Hormuz, which could force production shut-ins. Saudi Arabia’s 550,000-b/d Ras Tanura refinery has suspended operations following an attack, while Kuwait’s 350,000-b/d Mina Al-Ahmadi refinery and Oman’s Duqm port were targeted but avoided structural damage. In the UAE, the Musaffah fuel terminal was struck by a drone, and a fire is ongoing at the Port of Fujairah, a key storage and export hub.
Ship traffic through the Strait of Hormuz has effectively halted after five tankers were struck, with no oil transiting the 21-mile-wide chokepoint since early March 1. Roughly one-fifth of global oil flows pass through the strait each day. Although no mines have been deployed, the risk remains elevated, and a prolonged disruption would cause storage facilities to fill, ultimately forcing upstream production cuts.
The Gulf region accounts for about 11 million b/d of refining capacity, and its role in supplying European middle distillates has grown amid sanctions on Russian oil and recent refinery closures. While crude markets remain relatively well supplied, Foss warned that refined products are likely to be more volatile, particularly as spring maintenance season approaches.
In the U.S., President Donald Trump said the conflict could last four to five weeks, while officials signaled potential measures to ease supply concerns, including a possible release from the 415-million-bbl Strategic Petroleum Reserve. However, with infrastructure increasingly targeted, markets remain focused on escalation risks rather than spare capacity alone.
