WASHINGTON (dpa-AFX) - Crude oil surged on Friday as fresh attacks on Kuwait by Iran renewed concerns of a prolonged gulf war, stoking production disruption worries and overshadowing the signs of de-escalation that surfaced after Israel assured it would not continue to hit Iran's energy infrastructures.
WTI Crude Oil for April delivery was last seen trading up by $1.68 (or 1.75%) at $97.82 per barrel.
The war between the U.S.-Israel combined forces against Iran that began on February 28 kept pushing oil prices higher over the past three weeks.
The day before yesterday, Israel targeted Iran's South Pars gas field which catered to the domestic needs of Iran.
Iran retaliated by attacking energy sites in Saudi Arabia, Qatar, the United Arab Emirates, and Kuwait.
In a massive strike, Iran hit Qatar's largest LNG plant in Ras Laffan, compelling state-owned QatarEnergy to halt production. Announcing the damage to be very extensive, QatarEnergy observed that it would take more than a year to complete repairs, shocking oil traders globally.
Already Iran's blockade on the Strait of Hormuz has compelled Arab nations to halt production due to storage difficulties.
Trump asked Israel to hold back from attacking Iran's critical energy infrastructures.
Israel's Prime Minister Benjamin Netanyahu announced that in compliance with Trump's request, Israel has chosen not to target Iran's energy facilities and installations.
Of note, Netanyahu also suggested that the war could end sooner than expected as the U.S.-Israel combined attacks have degraded Iran's strategic capabilities.
This message was welcomed by traders who perceived this as a new sign of de-escalation.
Today, the Mina Al-Ahmadi refinery in Kuwait was hit by Iranian drones causing fires in several units of the facility, which processes around 346,000 barrels per day of crude oil renewing fears of escalation.
In an interview with Fox Business, U.S. Treasury Secretary Scott Bessent stated that the U.S. is considering lifting sanctions on Iran's oil stranded in the sea, which amounts to nearly 140 million barrels.
The move was intended to curb spiraling oil prices as well as to prevent China alone benefitting from the supply and provide access for Malaysia, Singapore, Indonesia, Japan, and India.
Bessent added that the U.S. could release more barrels from its strategic petroleum reserve to ease the pressure on prices.
Already, the Trump administration has eased sanctions on certain Russian oil shipments (around 130 billion barrels) for 30 days to balance the supply deficit.
Countries dependent on Arab oil and energy are desperate to find a replacement to the disrupted supply and hence the demand keeps oil prices from falling deeper.
Yesterday, though the Brent Crude surged, West Texas Immediate crude oil prices rose only marginally as traders priced in Wednesday's Energy Information Administration's inventory report on the U.S. crude oil, which showed a spike of 6.16 million barrels to 449.3 million.
Experts account this divergence due to Brent prices being linked to disruptions in the Strait of Hormuz, while WTI is impacted by stability in the U.S. supply conditions.
Traders are disinclined to accept that extensive disruption to oil and gas production can be reversed soon as they feel that a safe passage for tankers across the Strait of Hormuz, even if achieved sooner, logistic services revival could take a considerably longer time.
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