Oil extended rally past $100 as mined Hormuz chokepoint eclipses US sanction waivers

Global energy markets closed a historic week with sharp gains on Friday as the closure of the Strait of Hormuz outweighed emergency US policy measures intended to ease supply tensions.

Brent crude settled at $103.14 a barrel, up $2.68 (2.67%), while US WTI rose $2.98 (3.11%) to $98.71. Over the week, Brent surged 11.27% and WTI gained 8%, marking their strongest levels since August 2022.

Market movements were initially volatile, dipping on an erroneous report that an Indian tanker had navigated the strait before reversing sharply when maritime sources confirmed the waterway remained impassable. Heightening the supply risk, intelligence reports indicate Iran has deployed roughly a dozen naval mines in the strait, a tactical escalation that could extend any reopening timeline.

Efforts to ease market pressure have largely fallen short. Analysts said a US Treasury 30-day license allowing the purchase of 100 million barrels of stranded Russian oil addresses logistical hurdles rather than adding fresh supply. Similarly, the International Energy Agency’s record 400-million-barrel strategic release offered only brief relief, undone after Iranian Supreme Leader Ayatollah Mojtaba Khamenei vowed to maintain the blockade as leverage.

Traders are now positioning defensively for potential weekend shocks. Iraqi oil ports remain offline following explosive boat attacks, while US policy priorities focus on nuclear deterrence over fuel costs, reinforcing expectations of a prolonged outage. Structural divergence is emerging: Brent remains highly sensitive to European supply disruptions, whereas robust US output continues to support WTI. Reflecting these dynamics, Goldman Sachs projects Brent to average above $100 throughout March.

Written by: Aiman Haikal