Oil tanks filled, oil tankers shut down, multiple countries forced to reduce production! The oil price skyrocketed by 20% at the opening, breaking through $110.

With key waterways nearly completely closed, more major oil-producing countries cutting production, and the escalating threat from the United States deepening the conflict that has already disrupted the energy market, international oil prices have surged to over $110 per barrel. On Monday, Brent crude futures soared by 20% to $111.04 per barrel, while WTI crude futures jumped by 22%. As of the time of writing, Brent crude futures were up over 16% at $107.89 per barrel, and WTI crude futures were up nearly 19% at $108.04 per barrel. Over a week after the United States launched air strikes on Iran, there is no sign of easing in the Middle East conflict. Disruption of transport through the Strait of Hormuz (the narrow waterway that typically handles one-fifth of global oil) and attacks on energy infrastructure have pushed up oil and natural gas prices. At the same time, oil storage facilities in the Middle East have quickly filled up, and the UAE and Kuwait have started to reduce production. Iraq also began shutting down production last week. President Andy Lipow of the oil industry and market consulting firm Lipow Oil Associates said: "As the conflict continues, the inability to load tankers due to filled oil tanks suppressing production may mean that the psychological threshold of $100 per barrel is just a short-term target on the path to higher levels." Currently, over a dozen countries are involved in this conflict, and the war has raised concerns of an inflation crisis in the market. Retail gasoline prices in the United States have surged to their highest levels since August 2024, posing a major challenge for President Trump and the Republican Party in the midterm elections later this year. Nevertheless, Trump continues to push for war. Earlier last Saturday, he stated on social media that the United States would consider targeting areas and groups in Iran that had not previously been listed as targets. Before these comments were made, Iranian President Rouhani vowed not to back down. Reportedly, the Israeli military launched attacks on multiple fuel storage facilities in the Iranian capital of Tehran on the 7th. From the information available, this is the first time since the US and Israel launched military strikes on Iran on February 28 that Iranian civilian energy facilities have been targeted. In retaliation, the Islamic Revolutionary Guard Corps of Iran stated that Iran launched missiles at oil facilities in Haifa, Israel. Over the weekend, more major energy infrastructure came under threat, as Saudi Arabia intercepted and destroyed drones headed for the Shaybah oil field, which produces up to one million barrels per day. Last week, Saudi Arabia was forced to shut down its largest refinery, the Ras Tanura refinery, and sought to divert some of its crude oil to its Red Sea port for export after the closure of the Strait of Hormuz. Energy prices, including diesel and other products, are rising across the market. South Korea is considering whether to introduce an oil price cap for the first time in 30 years. Additionally, signs of recent supply constraints include the spot premium of Brent crude oil (the price difference between the two nearest contracts) expanding to over $8.24 per barrel - a bullish pattern well beyond the 62 cents difference a month ago. With time passing, several international banks have raised their expectations for oil prices. Barclays previously stated that if there were substantial supply disruptions, Brent crude prices could rise to around $80 per barrel. However, just days later, as the situation escalated, Barclays further warned that if the conflict in the Middle East continues for several weeks, Brent crude prices could test $120 per barrel, adding: "These figures may seem high, but we reiterate that the current fundamentals are stronger, and the risks are greater than during the Russia-Ukraine conflict - we saw oil prices touch these levels during that conflict." CKH HOLDINGS, an analysis firm in the Qatar Ministry of Energy, has provided a more "extreme" scenario. On March 6th, the Minister of Energy of Qatar issued a stern warning that the conflict in the Middle East would force the Gulf region to halt energy exports in a matter of weeks, and even if the conflict were to end immediately, Qatar would need "weeks to months" to return to normal delivery cycles. He predicted that oil prices could soar to $150 per barrel within two to three weeks. Vikas Devidi, global energy strategist at Macquarie, expressed a similar view. He believes that the closure of the Strait of Hormuz for several weeks will trigger a series of chain reactions that could push oil prices to $150 per barrel or even higher.