Crude Oil Prices Increase Amid Ongoing Supply Disruptions, Iran Rebuts Claims of US Diplomatic Discussions

Global Oil Markets: Brent and WTI Prices Surge Amid Persistent Supply Disruption

March 24, 2023

The global oil market experienced a significant rally on Tuesday, with Brent futures rising by $4.62, or 4.62%, to $104.56 per barrel at 2:16 p.m. ET (1816 GMT). U.S. West Texas Intermediate (WTI) climbed by $4.44, or 5.04%, to $92.57.

The ongoing conflict in the Gulf, which has resulted in the shutdown of approximately 20% of the world's oil and liquefied natural gas shipments through the Strait of Hormuz, continues to drive market volatility. The International Energy Agency has characterized this supply disruption as the largest ever recorded.

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Iran's denial of talks with the United States to end the war in the Gulf contradicts U.S. President Donald Trump's statement that a deal could be reached soon. Despite this mixed signal, the market remains concerned about the potential for long-term supply dislocations.

Macquarie estimates that if the Strait of Hormuz remains closed until the end of April, Brent prices could reach $150 per barrel, exceeding the all-time high of $147 set in 2008.

The conflict's impact on energy infrastructure continues, with recent attacks on gas company offices and pipelines in Iran. The likelihood of temporary shipping disruptions extending into long-term supply dislocations increases with each day of hostilities, according to Global X's research analyst Kenny Zhu.

Key Figures:

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• Brent futures: $104.56 per barrel (up $4.62, or 4.62%)
• U.S. West Texas Intermediate (WTI): $92.57 per barrel (up $4.44, or 5.04%)
• Supply disruption: Approximately 20% of global oil and liquefied natural gas shipments through the Strait of Hormuz
• Potential Brent price: $150 per barrel (if the Strait of Hormuz remains closed until the end of April)
• All-time high Brent price: $147 per barrel (set in 2008)