Oil Surges Toward $90 as Conflict Disrupts
Adrian Schimpf • March 6th, 2026
Oil Surges
Oil Surges Toward $90 as Conflict Disrupts Strait of Hormuz
Brent crude climbed to $90 per barrel, reaching its highest level in nearly two years as escalating conflict in the Middle East severely disrupted oil shipments through the Strait of Hormuz.
The global oil benchmark gained roughly 7.6% during Friday trading, while U.S. West Texas Intermediate crude moved above $85 per barrel, its highest price since April 2024. Over the course of the week, oil futures have risen more than 20%, marking the strongest weekly rally since 2022.
The surge reflects growing concerns about global supply after shipping traffic through one of the world’s most critical energy chokepoints slowed dramatically.
Strait of Hormuz Disruption Removes Millions of Barrels from Market
Energy markets have been shaken by a near collapse in commercial shipping through the Strait of Hormuz, a narrow passage that normally handles about 20 million barrels of oil and petroleum products each day.
According to maritime security monitors, vessel movement through the strait has almost stopped due to:
-Heightened security threats
-Rising insurance costs for tankers
-Operational uncertainty
-Direct disruptions to shipping activity
Analysts estimate that 7 to 11 million barrels per day of supply may currently be unable to reach global markets as a result.
This sudden loss of supply has triggered widespread market anxiety and rapid price increases across crude and refined fuels.
Regional Production Struggles as Storage Fills
The supply shock is beginning to affect production across the Gulf.
Reports indicate that Kuwait has started reducing output at some oil fields after running out of storage capacity for crude that can no longer be exported due to the shipping bottleneck.
Meanwhile, Saudi Arabia has begun redirecting shipments to Red Sea export terminals to bypass the Strait of Hormuz, though this only partially offsets the disruption.
The combination of halted shipments and storage limitations is forcing producers to make difficult decisions about maintaining production levels.
Governments Consider Emergency Oil Reserve Releases
Several governments are weighing emergency measures to stabilize energy markets.
Officials in the United States signaled that multiple policy tools remain available to ease price pressures, though the administration has not yet announced a release from the Strategic Petroleum Reserve.
Japan is reportedly evaluating a similar move, while analysts speculate that a coordinated release of oil reserves by several countries could be used to calm markets if disruptions continue.
In a separate effort to ease supply constraints, the U.S. Treasury temporarily relaxed restrictions allowing India to purchase certain shipments of Russian crude already stranded at sea.
Indian refiners have reportedly secured more than 10 million barrels of Russian oil, helping provide an alternative source of supply during the disruption.
Analysts Warn Oil Could Break $100
Major financial institutions are warning that the situation could push prices significantly higher if shipping disruptions persist.
Analysts suggest that if the Strait of Hormuz remains largely blocked for several more weeks, Brent crude could rise above $100 per barrel.
Some regional officials are even more aggressive in their forecasts. Qatar’s energy minister stated that prices could climb as high as $150 per barrel within weeks if tanker traffic fails to resume.
For now, several banks maintain a base case scenario in which shipments gradually recover, allowing prices to stabilize later in the year.
Refined Fuel Markets Already Experiencing Extreme Volatility
Even before crude oil fully reflects the supply shock, refined fuel markets are experiencing dramatic price swings.
European diesel futures have surged over 50% this week, representing the largest weekly increase ever recorded.
Meanwhile, China has instructed major refiners to halt exports of diesel and gasoline in order to protect domestic supply as global markets tighten.
The surge in refined product prices signals that downstream energy markets may feel the effects of the disruption even faster than crude benchmarks.
Oil Market Structure Signals Severe Short-Term Shortage
Market structure indicators suggest that traders expect supply shortages in the immediate future.
The price difference between the two nearest Brent futures contracts, known as the prompt spread, has widened to $5.76 per barrel, a market condition known as backwardation.
Backwardation occurs when near-term supply is perceived to be scarce, pushing current prices above future contracts.
Just one month ago, the spread stood at 58 cents, highlighting how quickly the oil market has tightened.
Overall
The disruption in the Strait of Hormuz has quickly transformed into one of the most significant energy shocks in recent years. With a substantial portion of global oil supply temporarily constrained, markets are reacting to the possibility of prolonged instability across the Middle East.
Governments are now weighing emergency responses, including potential releases from strategic reserves and policy adjustments aimed at stabilizing fuel prices. At the same time, refiners and importers are scrambling to secure alternative supply sources as tanker traffic through the region remains severely limited.
If shipping routes reopen and production stabilizes, prices may eventually moderate. However, if the disruption persists for several weeks, the oil market could face deeper shortages that push crude prices well above current levels.
For now, energy markets remain highly sensitive to developments in the region, with every escalation or diplomatic shift capable of rapidly reshaping global supply expectations.
Data & Methodology:
Kenneth French Data Library
Yahoo Finance
Bloomberg
Whistleblower
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