Oil Prices Jump to Highest Since 2022 as Hormuz Strait Remains Closed
Oil prices jumped to their highest level since 2022 after Iran reaffirmed plans to keep the Hormuz Strait closed, triggering a broad spike in global oil markets. Brent crude rose to close at $100.46 a barrel, up $8.48, or about 9.2%. U.S. West Texas Intermediate finished at $95.70, up $8.48, or roughly 9.7%. Both benchmarks had not closed at those levels since August 2022.
Iranian state media and officials signaled the Hormuz Strait would remain shut, intensifying concerns about supply disruptions. The funeral of Revolutionary Guard commanders on March 11 in Tehran featured a portrait of Mojtaba Khamenei, described as Iran’s new supreme leader in the report. Separately, Iranian-backed forces were reported to have attacked two crude tankers near waters off Iraq, and Iraqi authorities said their oil port operations were suspended. Oman also evacuated vessels from Mina Al Fahal, a major export terminal outside Hormuz, as a precaution.
Analysts warned that the dent to supply could be long-lasting even as countries stockpile oil. The International Energy Agency said the strategic petroleum reserve releases agreed by IEA members would provide only a short-term buffer and may not fully offset broader disruptions. The IEA noted that member countries have agreed to release a total of about 400 million barrels of SPRs.
Jim Burkhard, head of oil markets at S&P Global, told Reuters that the market is in a serious supply imbalance. He said stability would be hard to achieve until Hormuz reopens and production and refining capacity in the region returns to normal.
The IEA’s assessment highlighted that OPEC and other Middle East producers have collectively cut daily output by at least 10 million barrels per day, accounting for roughly 10% of global oil demand. It also estimated that roughly 2.35 million barrels per day of refining capacity at Middle Eastern refineries has been taken offline.
The U.S. Energy Department indicated that the U.S. Navy is not currently prepared to escort tankers through Hormuz but could be ready to do so by the end of the month. In response to the disruption, Saudi Arabia has been increasing crude exports via the Yanbu port on the Red Sea, while China has halted some refinery fuel exports in March to mitigate potential shortages arising from the Middle East crisis.
Why this matters to U.S. readers: a sustained spike in global oil prices can feed into gasoline prices, inflation, and energy costs for American households and businesses. The situation underscores the sensitivity of U.S. energy security to Middle East stability, with potential ripple effects on supply chains, defense planning, and financial markets. It also highlights how shifts in regional diplomacy and security posture in the Gulf can influence global markets, including pricing, investment, and policy considerations in Washington.