Oil rises over $1 as Iran crisis disrupts Middle East supply
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March 4 : Oil prices rose more than $1 on Wednesday as the U.S.-Israeli war on Iran disrupted Middle East output and halted exports from the region.
Brent rose $1.11, or 1.4 per cent, to $82.53 a barrel, after closing at its highest since January 2025 on Tuesday. U.S. West Texas Intermediate crude rose 79 cents, or 1.1 per cent, to $75.37, after settling at its highest since June.
Israeli and U.S. forces struck targets across Iran on Tuesday, prompting Iranian strikes against energy infrastructure in a region that accounts for just under a third of global oil production.
Iraq, the second-largest crude producer in the Organization of the Petroleum Exporting Countries, has cut output by nearly 1.5 million barrels a day, about half its production, due to storage limits and the lack of an export route, officials told Reuters. They said the country may have to shut its nearly 3 million bpd of output within days if exports do not resume.
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Iran has also targeted tankers in the Strait of Hormuz, through which about a fifth of the world's oil and liquefied natural gas flows. Traffic remained effectively closed for a fourth day after Iran attacked five ships.
However, comments from President Donald Trump that the U.S. Navy could begin escorting oil tankers through the Strait of Hormuz if necessary helped keep a lid on crude price gains.
Trump said he had ordered the U.S. International Development Finance Corporation to provide political risk insurance and financial guarantees for maritime trade in the Gulf.
But ship owners and analysts questioned if military escorts and insurance support would be enough to restore confidence.
Countries and companies have begun seeking alternative routes and supplies. India and Indonesia said they were looking for other energy supplies, while some Chinese refineries were shutting or moving up maintenance plans.
Saudi oil giant Aramco is attempting to reroute some exports via the Red Sea to avoid the Strait of Hormuz, sources said.
In the United States, crude stocks rose by 5.6 million barrels last week, according to market sources citing American Petroleum Institute figures, well above the 2.3 million barrels analysts projected. Official figures from the U.S. government are expected later on Wednesday.
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