Brent Crude Posts Biggest Monthly Surge Since 1988 as War Chokes Global Oil Supply

Brent crude oil futures posted over a 60% achieve in March. This marked the strongest month-to-month rally within the benchmark’s historical past, courting again to 1988. 

The May contract settled roughly 5% increased on Tuesday at $118.35 per barrel. West Texas Intermediate (WTI), the US benchmark, climbed about 51% throughout the month for its greatest efficiency since May 2020.

Strait of Hormuz Closure Drives Historic Supply Shock

Iran’s closure of the Strait of Hormuz following joint US-Israeli strikes on February 28 has rattled power markets. The International Energy Agency (IEA) described the disruption as the most important within the historical past of the worldwide oil market.

The power shock has already hit customers onerous. US fuel costs have risen $1.25 per gallon since December to $4 per gallon. This marked the very best worth since 2022. 

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In the UK, petrol reached 152.8p per liter, roughly 20p increased than at the beginning of the battle. JPMorgan’s international head of economics, Bruce Kasman, warned that a prolonged closure would push oil costs increased.

“A state of affairs wherein the Strait stays closed for a further month could be per oil costs rising in direction of $150/bbl and constraints on industrial customers of power provide,” he stated.

Bloomberg reported that US officers and Wall Street analysts have began discussing the potential for crude reaching $200 per barrel.

Meanwhile, President Donald Trump suggested the US could end operations in Iran inside two to a few weeks. According to the Wall Street Journal, Trump told aides he could be keen to finish the military campaign even if the Strait of Hormuz remained largely shut. 

Separately, the Journal additionally reported that the United Arab Emirates is getting ready to help the US in reopening the waterway by pressure.

Whether a diplomatic decision, army withdrawal, or pressured reopening of the strait comes first will doubtless form whether or not oil markets stabilize or proceed climbing.

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