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. 

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 the 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, OilPrice said.

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 any grade’s free-on-board value.

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.

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. 

Indeed, commodities traders warn $100 a barrel prices are just around the corner, Bloomberg predicted.

/OilPrice, Bloomberg/