By Anna Hirtenstein
LONDON, March 6 (Reuters) – Crude oil was set on Friday for its strongest weekly gain since the extreme volatility of the COVID‑19 pandemic in spring 2020, as conflict in the Middle East kept shipping and energy exports through the vital Strait of Hormuz halted.
Brent crude futures have surged nearly 22% this week, the biggest jump since May 2020 when a record OPEC+ production cut agreement prompted a recovery from pandemic lows. West Texas Intermediate has gained close to 27%, the most since April 2020.
On Friday, Brent extended its rally, rising $2.95, or 3.45%, to $88.36 per barrel at 1135 GMT. WTI rose $3.94, or 4.86%, to $84.95. Both benchmarks traded at their highest levels since 2024.
CRUDE AT $150 A BARREL?
Qatar’s energy minister told the Financial Times he expects all Gulf energy producers to shut down exports within weeks, a move he said could drive oil to $150 a barrel, according to an interview published on Friday.
Oil started its steep rally after the U.S. and Israel launched strikes on Iran on Saturday, prompting Tehran to stop tankers moving through the Strait of Hormuz, which handles roughly one-fifth of global daily oil supply.
The conflict has since spread across the Middle East’s key energy-producing areas, disrupting output and forcing shutdowns of refineries and liquefied natural gas plants.
“Every day the Strait stays closed, prices will go higher,” said Giovanni Staunovo, commodity analyst at UBS. “The belief in the market was that Trump might pull back at some point because he doesn’t want to have high oil prices, but the longer that takes, the clearer it is how much is at risk.”
U.S. President Donald Trump told Reuters in an exclusive interview on Thursday that he was not concerned about rising U.S. gasoline prices linked to the conflict, saying “if they rise, they rise” and that the U.S. military operation was his priority.
A White House official said the U.S. Treasury Department is expected to announce measures to combat rising energy prices from the conflict, a prospect that briefly pushed prices down by more than 1% earlier on Friday.
Losses narrowed after Bloomberg News reported that the Trump administration had ruled out using the Treasury Department to trade oil futures for now.
The Treasury on Thursday granted waivers for companies to buy sanctioned Russian oil stored on tankers to ease supply constraints that have forced refineries in Asia to cut fuel processing.
The first waivers went to Indian refiners, who have since bought millions of barrels of Russian crude, reversing months of pressure on them to halt the purchases.
Ship-tracking firm Kpler estimates about 30 million barrels of Russian oil are available and loaded on vessels in the Indian Ocean, Arabian Sea region and Singapore Strait, including volumes in floating storage.
Still, the recent rise in prices is relatively mild compared with earlier shocks, such as in 2022, when Russia’s attack on Ukraine pushed oil above $100 a barrel.
“It’s important to put this move into perspective: despite crude’s almost 20% surge this month, the price is currently just $3.40 above its average over the last four years,” IG analyst Tony Sycamore said.
(Reporting by Anna Hirtenstein in London. Additional reporting by Helen Clark in Perth and Sudarshan Varadhan in Singapore. Editing by Kevin Buckland, Mark Potter and Louise Heavens)
