Oil Surges 12% Weekly as Hormuz Strait Shipping Halts Amid Regional Conflict

Key Details West Texas Intermediate crude jumped 12% on March 6, closing just below $91 a barrel in its largest daily gain in nearly six years. Brent crude settled near $93 a barrel as shipping through the Strait of Hormuz came to a near-total standstill. Citigroup estimates the market is losing 7 million to 11 million barrels of daily supply due to the disruption, while Kuwait has cut production at some oil fields after exhausting storage capacity. Why It Matters Diesel futures posted weekly gains exceeding 50% in Europe, signaling inflationary pressure across transportation and logistics. The crisis threatens fuel costs for trucking operations and could drive consumer prices higher. Goldman Sachs warns oil could exceed $100 per barrel if hostilities continue without resolution. Government Response The White House has ruled out immediate Strategic Petroleum Reserve releases but signaled willingness to deploy multiple policy tools. The Treasury eased restrictions on India's Russian oil purchases, and the U.S. International Development Finance Corporation announced a $20 billion maritime reinsurance plan for the Gulf region. Market observers anticipate a coordinated international release from emergency oil inventories could stabilize prices if regional tensions persist. Immediate Outlook Only nine empty VLCCs remain available for crude storage from Middle Eastern producers. Once filled, onshore tanks will reach capacity quickly, potentially tightening supplies further and sustaining elevated fuel prices at the pump.