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Oil Tops $81 a Barrel, Highest Mark Since July 2024
War in Iran Disrupts Crude Flows to Key Buyers
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The rally in U.S. oil futures took another swift move higher, sending prices to the loftiest level in about 20 months as investors increasingly price in a prolonged war in the Middle East that could upend global crude flows.
West Texas Intermediate surged as much as 8.7% to climb above $81 a barrel. Prices touched the highest since July 2024. Brent traded above $85.Ìý
Prices of refined fuels are surging too. In Europe, benchmark diesel futures topped the equivalent of $150 a barrel, a level they haven’t closed above since late 2022.
Signs are emerging that the Middle East conflict is disrupting crude flows to key buyers, with top importer China moving to conserve fuel as Iran, the U.S. and Israel vow to press ahead with hostilities.
U.S. oil rallied faster than Brent on March 5 as mounting concerns over a prolonged disruption through the Strait of Hormuz, a choke point for one-fifth of global oil flows, boosted demand for WTI barrels that aren’t exposed to potential Gulf bottlenecks.
The heightened demand for U.S. oil comes as surging freight rates make American barrels more expensive to ship. Seasonal refinery maintenance is additionally tightening domestic supply, further supporting prices.
That dynamic is also reflected in the prompt spreads — the difference between its two closest contracts — for both benchmarks. The prompt spread for Brent has widened by nearly $4 a barrel in just over a week, while the equivalent WTI measure has increased by only about $1, underscoring the more acute near-term tightness in the North Sea market.
The conflict has roiled oil, gas, and product markets, lifted freight rates, and spawned an ever-widening wave of disruption for producers as well as importing nations that rely on flows from the region.
