Brent tops $90 as the Strait of Hormuz closure halts Gulf oil flows and Iraq and Kuwait begin cutting output, fueling fears of a sharper price surge.
Friday, March 06, 2026
When a US President declares that there would be no deal with Iran except for ‘unconditional surrender’, the oil markets rally. Hence, there should be nothing surprising about ICE Brent jumping above $90 per barrel for the first time since April 2024, as the closure of Strait of Hormuz continues, with zero crude oil movement out of the Persian Gulf. With Iraq and Kuwait starting to cut production, it seems that the sky is the limit for the current oil price rally.
US Allows India to Buy Russian Oil, for a Month. The US Department of Treasury has authorized Indian refiners to temporarily increase their purchases of Russian oil, provided the cargoes were loaded onto vessels before March 5 and arrive to India within the next 30 days, boosting the price of Russian grades.
Shippers Reject Trump’s Tanker Insurance Offer. US President Trump said that the US Navy could begin escorting commercial oil tankers through the Strait of Hormuz if necessary, reacting to insurance firms halting coverage in the region, however there are still no crude transits out of the Gulf since March 1.
Related: Why Trump Wants Magnets More Than Gold
Middle East Freight Rates Cost More than Ever. VLCC freight rates from the Middle East to northeast Asia continue to rise on the closure of the Strait of Hormuz, jumping to an equivalent of $16 per barrel this week, representing approximately 20% of the any grade’s free-on-board value.
Japan’s Refiners Lobby for Strategic Oil Release. Japanese oil refiners have started to lobby their government to release crude from the country’s strategic petroleum reserves, wary of crude oil shortages as the island nation relies on the Middle East for 95% of its crude oil imports.
Following Iraq, Kuwait Starts to Curb Oil Output. After Iraq was forced to shut its West Qurna-2 and Rumaila fields this week, Kuwait’s state oil firm KPC started to cut production at some of its fields as storage tanks are filling up fast in the country, having already shut its 464,000 b/d Mina Abdulla refinery.
Qatar’s Liquefaction Will Take Weeks to Restart. According to media reports, QatarEnergy intends to keep its Ras Laffan gas liquefaction plant offline for at least two weeks as it will take another two weeks to resume LNG production, shutting 20% of global LNG supply for the next month.
Russian Shadow LNG Tanker Sinks in the Med. The Arctic Metagaz LNG carrier sank in the Mediterranean after the ship, a ship used by Russia’s Novatek to transport liquefied gas from the Arctic LNG 2 project, after an alleged drone attack by Ukraine’s security services, launched from Libya.
Hungary’s Oil Dearth Enflames European Tensions. Hungary’s state-controlled oil firm MOL (BUD:MOL), more than a month into an outage that halted Russian oil flows to central Europe, reported Croatian pipeline operator JANAF to Europe’s competition watchdog for refusing to transport Russian oil by sea.
Saudi Arabia’s Refining Struck by Strikes. Saudi Aramco’s (TADAWUL:2222) largest refinery in Ras Tanura was targeted by a second drone attack this week, hitting the 550,000 b/day plant a day after it temporarily stopped operations, adversely impacting the country’s gasoline production.
Gulf War Aggravates World’s Aluminium Problem. The constant bombardment of Bahrain by Iranian missiles and drones forced Aluminium Bahrain, one of the largest smelters globally, to halt all export shipments, sending the metal’s price up 5% this week, to $3,420 per metric tonne.
Trump Flaunts Treasury Dept Oil Trading. Following intense media speculation that the US Treasury Department is considering measures to combat rising energy prices, potentially even trading oil futures to counteract the bullish rally, the Trump administration denied such plans, for now.
Related: How China’s Rare Earth Ban Backfired into a U.S. Tech Breakthrough
Where do We Get the Sulphur from Now? The prolongation of the US-Israel-Iran conflict threatens to disrupt nickel, copper and lithium miners globally as they require sulphur for their leaching and refining operations, with the Persian Gulf accounting for 50% of global supply.
Beijing Suspends Product Exports to Ensure Supply. China’s top economic planner NDRC has instructed the country’s refiners and traders to focus on supplying the domestic market as the closure of Strait of Hormuz drains Asia of crude feedstocks, suspending the issuance of product exports for April 2026.
Shell Wriggles Its Way into Venezuela. London-based energy major Shell (LON:SHEL) has signed several oil agreements with the Venezuelan government to boost offshore oil and gas output in the country, aiming to expedite the development of the Dragon gas field and export first gas to Trinidad by Q3 2027.
By Tom Kool for Oilprice.com
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