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Global oil markets aggressively extended their upward trajectory on Wednesday following coordinated Iranian strikes against critical Gulf energy facilities. Retaliating for a reported Israeli attack on its South Pars gas field, Tehran inflicted extensive damage on Qatar's Ras Laffan Industrial City and prompted mid-air interceptions over Saudi Arabia. With imminent strike warnings issued across the UAE, Saudi Arabia, and Qatar, the entire Gulf energy apparatus has effectively become an active combat zone.

Brent crude futures settled up 3.8% at $107.38 a barrel, surging 5.6% in post-settlement trading. Conversely, US WTI closed marginally higher by 11 cents, or 0.1%, at $96.32, widening the transatlantic spread to an 11-year high. This profound structural divergence reflects WTI's suppression by a 6.2-million-barrel US inventory build and emergency releases, while Brent fully captures the severe international geopolitical risk premium.

The expanding conflict has completely halted Strait of Hormuz shipments, abruptly choking off 20% of global oil and liquefied natural gas supply. Consequently, Middle Eastern output cuts are estimated between 7 million and 10 million barrels per day, equating to a sudden loss of up to 10% of global demand that the market cannot readily replace.

Institutional interventions remain vastly outmatched by these physical deficits. A 60-day US Jones Act waiver and temporary Venezuelan crude licences offer little relief to international buyers facing physical shortages. Although the resumption of 250,000 barrels per day of Iraqi crude exports via Turkey provides marginal fundamental relief, market positioning remains aggressively skewed upside as cascading infrastructure threats guarantee extreme near-term volatility.


Written by: Aiman Haikal