HOUSTON, March 5, 2026, 12:20 (CST)
Oil prices surged over 3% on Thursday, as the U.S.-Israeli conflict with Iran snarled Middle East supply lines and shipping routes. Brent crude, the global benchmark, advanced $2.92, or 3.6%, to $84.32 a barrel at 11:43 a.m. EST (1643 GMT). U.S. West Texas Intermediate (WTI) shot up $4.40, or 5.9%, landing at $79.06. “Crude prices are going to be very sensitive to the Strait’s closure,” said Dennis Kissler, senior vice president of trading at BOK Financial. 1
For a fifth straight day, shipping through the Strait of Hormuz remains at a standstill, blocking a crucial artery for Middle Eastern oil and gas. Iraq has already pulled nearly 1.5 million barrels per day (bpd) from the market, warning that almost 3 million bpd could go offline in the coming days if the situation drags on. In the U.S., crude inventories jumped by 3.5 million barrels last week to the highest level seen in three and a half years, according to the Energy Information Administration. “The crucial Strait of Hormuz chokepoint is effectively shut,” said Nikos Tzabouras, senior market analyst at Tradu.com. 2
Asian refining margins have shot up, now sitting at their highest point in close to four years as tight crude supplies squeeze the fuel market. On Wednesday, Singapore’s complex margin touched nearly $30 a barrel. Jet fuel margins topped $52, and low-sulphur diesel cracks moved beyond $48. (A crack spread tracks the difference between the price of refined product and crude.) “This is symptomatic of an impending shortage of feedstocks,” said June Goh, senior oil market analyst at Sparta Commodities. 3
Conditions in the Gulf have deteriorated. Reuters tallied roughly 200 vessels—oil and LNG tankers among them—idling off top exporting nations, and hundreds more left waiting offshore, unable to dock. This stretch of water moves about 20% of global oil and LNG. 4
Qatar invoked force majeure on its gas exports Wednesday, according to sources, as shipping traffic through the Strait of Hormuz largely froze. The rarely used contract clause lets companies off the hook for deliveries if outside circumstances get in the way. Getting output back up to normal could take a month or longer, the sources added. Qatar is responsible for roughly 20% of the world’s LNG supply. “Nothing can replace Qatari LNG,” said Saul Kavonic, head of energy research at MST Marquee. 5
Forecasts are on the rise as the disruption stretches out. Goldman Sachs bumped up its Brent crude outlook for the second quarter of 2026 by $10, now targeting $76 a barrel. WTI? Up $9 to $71. The bank pointed to sharply reduced oil shipments through Hormuz and a drop in OECD inventories as the drivers. 6
Goldman economists flagged that if oil briefly jumps to $100 a barrel, global growth could get knocked back by 0.4 percentage point and headline inflation would tick higher. Central banks? A larger, longer shock could push them to tighten policy. Goldman’s base case expects prices to climb a bit more, then average out at $76 a barrel in the first quarter, dropping to $65 by the fourth. 7
The market keeps snapping back with every diplomatic whisper; prices can flip in a heartbeat. Take the New York Times piece—traders jumped on word that Iranian intelligence operatives might be open to discussions with the U.S. Central Intelligence Agency, and the risk premium shifted just like that. But Iran’s intelligence ministry shot down the story, calling it “absolute lies,” Tasnim news agency reported. 8
