Crude Oil Prices Soar to 2024 Peak Amid Hormuz Strait Blockade Crisis

TLDR

• Brent crude advanced 2.6% to reach $83.54 per barrel; WTI surged 3.1% to $76.96 during Thursday trading
• Strait of Hormuz effectively shut down by Iran — maritime traffic collapsed more than 95%
• Iraq announced force majeure, slashing approximately 1.5 million barrels daily from production
• Market analysts project Brent could surge to $140/barrel under full blockade; $100 under partial disruption
• Beijing ordered refineries to stop fuel exports; Tokyo prepared to access emergency oil stockpiles

The escalating Middle East crisis reached its sixth consecutive day on Thursday without any signs of de-escalation, propelling crude oil valuations to their strongest levels since July 2024.

Brent crude futures advanced 2.6% to settle at $83.54 per barrel. West Texas Intermediate jumped 3.1% to reach $76.96. The rally marks five consecutive sessions of gains for both key benchmarks.

Hostilities erupted over the weekend following synchronized military operations by the U.S. and Israel targeting Iranian assets. Subsequently, American naval forces destroyed an Iranian warship in international waters off Sri Lanka’s coast.

On Wednesday, the U.S. Senate rejected a resolution—voting primarily along partisan lines—that would have mandated Congressional authorization for continued aerial operations.

Tehran firmly denied media reports suggesting Iran’s intelligence ministry had initiated backdoor negotiations with Washington, dismissing such claims as “pure falsehood.”

The Strait of Hormuz Blockade

The Strait of Hormuz has emerged as the epicenter of this energy crisis. Approximately 20 million barrels of oil and petroleum products traversed this waterway daily throughout 2025, per International Energy Agency statistics.

Maritime tracking data compiled by Bloomberg reveals vessel traffic through the strategic chokepoint has plummeted over 95%. The vast majority of shipping companies are rerouting around the area completely.

Iraq invoked force majeure on certain crude oil shipments following the transportation breakdown. Baghdad has trimmed production by roughly 1.5 million barrels per day, according to statements made to Reuters.

As OPEC’s second-largest petroleum producer, Iraq’s supply curtailment represents a primary catalyst behind the current price acceleration.

The United States has floated a proposal to extend insurance coverage guarantees and potentially deploy naval convoy protection for commercial vessels. Marsh, the world’s preeminent insurance brokerage firm, indicated such arrangements could require several weeks to implement.

One petroleum tanker, the Sonangol Namibe, sustained damage in an attack within the northern Persian Gulf region. The vessel experienced water leakage from a ballast compartment but avoided any crude oil spillage.

How Asian Importers Are Responding

China directed its major state-controlled refineries to immediately cease diesel and gasoline export activities. The Chinese government is focusing on securing adequate domestic fuel supplies as the disruption constrains regional availability.

Japan formally requested governmental authorization to tap into its strategic petroleum reserve stockpiles. Additionally, a prominent Indian refining operation notified commercial partners it would temporarily suspend product export commitments.

Energy analysts from ING predict a complete closure of the strait could catapult Brent crude to $140 per barrel. A scenario involving partial disruption combined with sporadic tanker attacks might initially drive prices toward $100 before stabilizing within an $80–$90 trading band.

U.S. crude petroleum inventories expanded by 5.6 million barrels during the week concluding February 28, data from the American Petroleum Institute revealed. This increase exceeded market forecasts anticipating a 2.2 million barrel accumulation.

Official storage data from the U.S. Energy Information Administration was scheduled for release later Thursday.

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