Oil headed for the biggest weekly surge since 2022 as the war in West Asia unleashed a wave of disruption across energy markets, with producers, importers and shippers struggling to deal with the fall-out.
Brent has rallied 17 per cent this week, although futures dipped below $85 a barrel on Friday after President Donald Trump signaled “imminent action” to reduce pressure on prices, and the Treasury Department eased curbs on India’s ability to buy Russian oil. West Texas Intermediate was near $80.
With no sign of a let-up in hostilities, Goldman Sachs Group Inc, flagged the risk of scenarios for oil topping $100 a barrel were disruption to extend; diesel futures headed for a weekly gain of more than 40 per cent; and central banks signalled their unease about a possible resurgence in inflation.
Oil markets have been rocked by the conflict, which has ensnared about a dozen nations since the US and Israel launched their campaign on Feb. 28.
As the hostilities have flared, shipping through the Strait of Hormuz has all but halted, choking off oil supplies to global markets and prompting producers to start shutting-in output. Refineries and tankers have been hit.
Iranian Foreign Minister Abbas Araghchi told NBC News his country had no intention to negotiate and was ready for a possible ground invasion, although Trump commented later to the same station that he was not thinking about such a move.
Israel, meanwhile, launched another broad wave of strikes against Iran, and Saudi Arabia and Qatar said they had intercepted drone and missile attacks.
The prospect of a drawn-out conflict has put the market on edge. Last year, about 20 million barrels of oil and petroleum products flowed through the Strait of Hormuz every day, according to a tally from the International Energy Agency. Ship-tracking data this week has suggested that marine traffic through the key artery has collapsed.
With importers struggling to get barrels, the US Treasury Department’s Office of Foreign Assets Control issued a short-term waiver to allow India to buy Russian crude. The move “only authorizes transactions involving oil already stranded at sea,” Treasury Secretary Scott Bessent said.
Goldman Sachs warned that a prolonged disruption at Hormuz — which typically carries about a fifth of global oil flows — could lift prices far higher, although the bank’s base case at present is for a gradual recovery of shipments and futures to average $76 a barrel in the second quarter.
“Let’s say you have another five weeks of very low flows of oil through the strait,” Samantha Dart, the co-head of global commodities research at the Wall Street lender, told Bloomberg Television. “It is possible we would see Brent prices cross the $100-per-barrel threshold.”
US Interior Secretary Doug Burgum said the administration was weighing a range of options for addressing the spike in oil and gasoline. “Everything is being considered,” Burgum said, adding that the list included actions that would have immediate impact as well as longer-term, more complex moves.
Possible decisions includes a release from the country’s emergency oil inventory, potentially in coordination with other nations to maximize effect. Administration officials, however, have so far not moved to tap the Strategic Petroleum Reserve, a cache of crude held in vast underground caverns.
In Asia, signs of strain for top economies are mounting. China has told major refiners to suspend exports of diesel and gasoline, reflecting efforts to prioritize domestic needs. Elsewhere, Japanese refiners asked their government to release oil from strategic reserves.
As the conflict widens, constraining supplies from West Asia, Saudi Arabia raised the price of its main oil grade for buyers in Asia for April by the most since August 2022. Riyadh is also diverting millions of barrels to its Red Sea ports to avoid the Strait of Hormuz.
Product prices have soared. In Europe, low-sulfur gasoil futures have rallied by about 42 per cent so far this week, the biggest move on record, while in the US, average retail gasoline prices are up about 9 per cent, according to the American Automobile Association.
In a sign of near-term tightness, Brent’s prompt spread — the difference between its two nearest contracts — widened to $4.35 a barrel in backwardation, a bullish pattern. A month ago, it was 58 cents.
More stories like this are available on bloomberg.com
More Like This
Published on March 6, 2026