Strikes, tanker attacks, and a silent Hormuz push Brent to $84, with $90 oil now firmly in sight.
The Hormuz Closure That No One Wants to Talk About
– The Israel-US-Iran conflict engulfing most of the Persian Gulf has pushed $10 per barrel higher, LNG prices went up by $15 per MMBtu, and key refined products such as diesel and jet have been spiralling out of control throughout the Atlantic Basin.
– Whilst market watchers almost unanimously define the closure of the Strait of Hormuz as the main bullish factor ahead, very few have, in fact, noted that the Strait has been closed for the past two days.
– There have been no crude oil or LNG transits via the Strait of Hormuz on March 2-3, with dozens of fully loaded ships expecting the end of the regional conflagration, anchored across the Persian Gulf.
– The US Central Command, seeking to placate fears, stated today that the Strait of Hormuz is ‘not closed despite statements by Iranian officials’, even as Saudi Arabia officially announced that it would move all its oil exports to the Red Sea, in avoidance of Hormuz.
– According to Kpler, there are already 55 fully loaded VLCC tankers in the Gulf, up by 18 ships since Israel’s initial attack on Iran that took place on February 28.
Market Movers
– UK-based energy major Shell (LON:SHEL) is reportedly considering selling its minority stake in Australia’s North West Shelf LNG project, potentially garnering $24 billion for the sale as both ADNOC and MidOcean Energy declared interest.
– Angola’s national oil firm Sonangol is moving ahead with its plans for an initial public offering, completing debt sales and establishing an investor relations office as 30% of its shares could be offered in the IPO.
– Norway’s state-controlled Equinor (NYSE:EQNR) is reportedly looking to divest its Angolan assets, building on its 2024 exits from Azerbaijan and Nigeria, seeing quicker returns in Brazil and US deepwater.
– Global trading giant Trafigura signed a 5-year LNG term supply contract with US developer Venture Global (NYSE:VG) starting from Q2 2026, the latter’s first mid-term deal concluded since its arbitration deals with Shell, BP and Repsol.
Tuesday, March 03, 2026
Events are escalating with unprecedented speed across the Middle East. Drone strikes on Saudi Arabia’s largest refinery, strikes on the world’s largest liquefaction facility in Qatar, the bombing of several tankers, widespread insurance policy cancellations – all that would be usually scattered across several months in a normal year; however, in 2026, that’s just one day’s worth of action. With the Strait of Hormuz seeing no navigation for several days already, ICE Brent is up at $84 per barrel, and it could very well test the $90 per barrel if the pressure on Gulf producers increases.
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OPEC+ Opted for Caution Amidst War Pressures. Members of OPEC+ agreed to a relatively modest oil production increase of 206,000 b/d for April 2026, defying the pressure to triple its usual monthly quota on fears that Iranian supply would be curtailed, just as the Strait of Hormuz was set to close.
Qatar Halts World’s Largest LNG Plant. Qatar’s state-owned QatarEnergy has halted production at its Ras Laffan liquefaction plant, the world’s largest LNG object, following reports that Iranian drones have targeted an ‘energy facility’ in Qatar as well as an adjacent power plant in Mesaieed.
Saudi Arabia’s Refining Takes a Hefty from Iran. Saudi Arabia’s largest refinery, the 550,000 b/d Ras Tanura plant on the country’s eastern coast, halted operations completely after a drone attack sparked a large fire on Monday morning, raising the risk of Saudi production shut-ins.
Chinese Refiners Go for Run Cuts. China’s leading private refiners Zhejiang Petrochemical and Fujian Refining, which both happen to be partially owned by Saudi Aramco, have announced curtailments in refinery operations rates in response to stalled crude oil deliveries from the Middle East.
Stranded Oil Tankers Push Oil Freight to Records. Iran’s closure of the Hormuz Strait and the risk of seeing tankers struck or stranded in the Persian Gulf lifted freight rates for VLCC tankers to a new high, with a Gulf-to-China voyage now costing $89 per metric tonne, up 560% since early January.
Asia’s Naphtha Cracks Balloon Out of Control. Fears that Middle Eastern naphtha, a 1.2 million b/d stream mostly fed by the UAE and Qatar, could become stranded in the Persian Gulf have lifted Asian naphtha cracks to their highest since April 2022, reaching a $135 per tonne premium vs Brent.
Platts Doesn’t Know What Dubai to Assess. Global price reporting agency S&P Global Platts has suspended bids and offers for some of its Middle Eastern crude, refined product, and LNG price assessments, allowing only Murban and Oman trades as all other grades load deep in the Gulf.
Israel Shuts Down Offshore Gas Fields. The Israeli Energy Ministry has ordered the temporary shutdown of the country’s offshore gas platforms, including the Chevron-operated (NYSE:CVX) Leviathan field that supplies 40% of the country’s gas needs, switching to alternative fuels.
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Insurers Avoid Hormuz as Much as They Can. Marine insurers are cancelling war risk coverage for tankers set to enter the Strait of Hormuz, with Gard, Skuld, NorthStandard, the London P&I Club, and the American Club collectively claiming they would fully cut coverage from March 5.
Keystone XL Might Be More Alive Than Dead. Canada’s midstream giant South Bow (TSE:SOBO), spun out of TC Energy in 2024, is reportedly seeking to revive the Keystone XL pipeline by re-routing it through Montana, potentially boosting Canada-to-US crude flows by another 550,000 b/d.
Nigeria Gets Creative With Its Blocks. The government of Nigeria has broken up the OPL 245 offshore license block into four new assets operated by European majors ENI (BIT:ENI) and Shell (LON:SHEL), paving the way for the long-stalled development of Nigeria’s largest untapped field.
Kurdish Producers Cut Output Amidst Drone Hits. Following massive Iranian drone strikes on US military installations in Erbil, oil companies operating in the semi-autonomous Iraqi Kurdistan have started to shut in production, with Gulf Keystone and Shamaran shuttering 110,000 b/day of output.
Brace Yourself for a New Copper Disruption. Copper prices could be up for another supply disruption-driven price spike after widespread flooding caused the collapse of a bridge linking the Democratic Republic of Congo to Zambia, the main export conduit for its 3.5 mtpa exports.
Saudi Aramco Reinvents the Red Sea. Saudi Arabia’s state oil firm Saudi Aramco (TADAWUL:2222) has alerted its buyers that from now on, for an undefined period, it would only load crude oil tankers from its Red Sea port of Yanbu, sending oil to the west through its 5 million b/d East-West pipeline.
By Tom Kool for Oilprice.com
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