Iran Declares Strait of Hormuz Closed, Warns Ships Face Attack

Iran’s Revolutionary Guards have declared the Strait of Hormuz closed and warned they will attack any vessel attempting to transit the key waterway amid escalating tensions with the US and Israel. A senior Guards adviser said ships entering the strait would be “set ablaze,” threatening a route that carries roughly 20% of global oil supplies. The chokepoint connects major Gulf producers such as Saudi Arabia, Iraq and the UAE to world markets, making it vital for energy trade.

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Headlines

· Iran Declares Strait of Hormuz Closed, Warns Ships Face Attack

· Trump Vows to Do ‘Whatever It Takes’ in Iran Campaign

· Dubai-Owned Tanker Ablaze as Iran Expands Its Target List to Seven Ships

· Oil Supertanker Rates Hit Record High Amid Iran Conflict

· Around 9% of Global VLCC Fleet Said to Be Stranded in the Gulf

· Saudi Arabia’s Largest Refinery Halts After Drone Strike

· Qatar LNG and Israeli Energy Fields Hit by Regional Attacks

· Oil Producers Lock In Prices After Sharp Rally

· US Diesel Futures Climb to Two-Year Peak on Middle East Supply Fears

· US LNG Exporters Gain From Middle East Disruptions

· Canada’s Heavy Crude Discount Narrows as Middle East Supply Fears Boost Prices

· Iran Conflict Disrupts Oil Flows to Asia as Shipping Risks Escalate

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Oil and Gas Prices Surge as Iran Conflict Shakes Middle East Energy Supply

Oil and gas prices spiked after U.S. and Israeli strikes on Iran and Tehran’s retaliation disrupted Middle East production and shipping through the Strait of Hormuz, a key route for 20% of global crude and LNG. Brent crude jumped as much as 13% to $82.37 a barrel before settling at $77.74, while U.S. WTI rose to $71.23. Saudi Arabia shut its largest refinery after a drone strike, Qatar halted LNG production, and 150 ships remain stranded near Hormuz following attacks that damaged multiple tankers. Analysts warn that a prolonged disruption could push Brent above $100 and cause global fuel price volatility. Despite strong supply from OPEC+, the U.S., and Guyana, energy markets are experiencing heightened uncertainty, with Asian LNG up nearly 39% and U.S. gasoline exceeding $3 a gallon, underscoring the conflict’s immediate impact on energy costs worldwide.

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Oil Supertanker Rates Hit Record High Amid Iran Conflict

The cost of shipping crude from the Middle East to China surged to a record as conflict between the US and Iran disrupted traffic through the Strait of Hormuz. According to the Baltic Exchange, benchmark earnings for VLCCs jumped to about $424,000 per day, while voyages from the US Gulf Coast to China exceeded $21 million. Freight rates on the key Middle East–China route climbed to around 700 Worldscale points, more than triple last week’s levels, reflecting extreme volatility and uncertainty. Traders are closely watching developments in Hormuz, which handles roughly one-fifth of global oil and LNG flows, as physical freight activity slows with few willing buyers or sellers at current prices.

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Trump Vows to Do ‘Whatever It Takes’ in Iran Campaign

Donald Trump said the US will continue its military offensive against Iran for “whatever it takes,” outlining four goals: eliminating Iran’s missile capabilities, destroying its navy, blocking its path to a nuclear weapon and ending support for armed groups abroad, while stopping short of calling for regime change. Defense Secretary Pete Hegseth declined to set a timetable as the conflict entered its third day with four US servicemembers confirmed dead and more casualties possible. Iran has intensified retaliatory missile strikes after the reported death of Supreme Leader Ali Khamenei, raising fears of broader regional escalation. Energy and financial markets have been rattled, with tanker traffic through the Strait of Hormuz sharply reduced, oil and gas prices surging and airlines including Emirates and Etihad Airways facing widespread disruption.

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Strikes Kill Founder of ‘Dark Fleet’ Shipping Empire

US-Israeli strikes in Iran have reportedly killed Ali Shamkhani, founder of Dubai-based Admiral Group and a close military adviser to Supreme Leader Ali Khamenei. The Israel Defense Forces announced his death, later confirmed by Iranian authorities, marking a major blow to Tehran’s leadership circle. Shamkhani, a former rear admiral in the Revolutionary Guard Navy and ex-defense minister, later built a shipping network that evolved — under his son Hossein — into a major operator of “dark fleet” tankers and LPG carriers tied to Iranian and Russian trades. Both father and son have been under US and EU sanctions, and analysts say his death could create uncertainty over the future control of the Shamkhani-linked fleet.

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US-Flagged Tanker Stena Imperative Damaged in Persian Gulf

The US-flagged oil tanker Stena Imperative, part of a US military fuel procurement program, was damaged by aerial impacts while berthed in the Persian Gulf, according to its manager Crowley. The incident occurred shortly after 2 a.m. local time, triggering a fire that was later extinguished, with no injuries reported among the crew. The vessel has since been secured, though the episode adds to mounting concerns over shipping safety in the region amid escalating tensions. Earlier reports also indicated a separate vessel was seen ablaze near Bahrain.

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Saudi Arabia’s Largest Refinery Halts After Drone Strike

Saudi Aramco suspended operations at its 550,000-barrel-a-day Ras Tanura refinery after drones targeted the facility on the Persian Gulf coast, prompting a precautionary shutdown while damage is assessed. The Saudi Energy Ministry said debris from intercepted drones caused a limited fire that was quickly contained, but the closure rattled energy markets already strained by escalating conflict involving Iran. ICE gasoil futures surged more than 20% — the largest intraday jump since 2022. Ras Tanura is a critical supplier of diesel to global markets and sits near Aramco’s largest crude export terminal, though tanker loading operations at nearby offshore moorings were reported to be continuing.

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Tankers Idle in Gulf as Hormuz Traffic Slows to a Crawl

Dozens of oil tankers are idling inside the Persian Gulf as security threats near the Strait of Hormuz sharply reduce vessel movements, disrupting exports and raising risks for producers. At least 40 VLCCs loaded with roughly 2 million barrels each are waiting for safer conditions before attempting transit. The Joint Maritime Information Center raised its alert level to “critical” following confirmed missile and drone attacks, while major insurers have withdrawn war-risk coverage for ships entering the Gulf. With traffic collapsing and limited storage capacity available, a prolonged disruption could eventually force producers to curb output, while LNG shipments from Qatar — which must pass through Hormuz — also face mounting uncertainty.

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China’s Oil Stockpile Gives Refiners a Short-Term Cushion

China’s refiners are currently insulated from immediate supply disruption risks tied to the conflict involving Iran because of large crude inventories and floating stores of Iranian barrels at sea, as well as record purchases of discounted Iranian and Russian crude. China’s strategic oil reserves amount to roughly 900 million barrels — about 78 days of imports — helping blunt short-term shocks even as tanker traffic via the Strait of Hormuz slows sharply, and traders report no immediate supply risks for March and April deliveries. Independent “teapot” refineries that rely on cheap Middle East barrels could face tighter markets if flows remain constrained, but plentiful onshore stocks, especially in regions like Shandong, along with growing Russian crude imports, are easing pressure for now.

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India Weighs Russian Oil as Iran Crisis Disrupts Supplies

India, the world’s third-largest crude importer, is considering ramping up purchases from Russia as tensions involving Iran disrupt flows through the Strait of Hormuz, a route that carries roughly half of its oil imports. Officials say current reserves could last about two weeks, but refiners are exploring alternatives including tapping strategic stockpiles, sourcing more from Venezuela and asking Saudi Aramco to reroute shipments via the Red Sea. A prolonged disruption could force India to curb fuel exports and prioritize domestic supply.

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Ukraine Drone Strike Halts Russian Oil Exports at Novorossiysk

Ukraine attacked Russia’s Sheskharis oil terminal in Novorossiysk, damaging six of seven loading facilities, setting a fuel terminal on fire, and injuring five, prompting a suspension of exports from the Black Sea port that handles 700,000 bpd. Ukrainian drones reportedly also targeted Russian warships and a naval base. Russian authorities claimed to have downed 172 drones overnight. Nearby Caspian Pipeline Consortium operations paused briefly but resumed by midday, and Kazakhstan’s oil output remained unaffected.

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Venezuela’s Crude Exports Nearly Double Under US Oversight

Venezuela’s crude exports climbed to about 788,000 bpd in February, nearly double January’s level, after the capture of Nicolás Maduro led Washington to oversee the country’s oil sales. US refiners sharply increased purchases through companies including Chevron Corp., Vitol Group and Trafigura Group, while China has yet to resume buying. Output also improved as Venezuela regained access to heavy naphtha diluents needed to move its extra-heavy crude. The rebound comes as global energy markets remain volatile amid supply concerns tied to tensions involving Iran.

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US Presidents Tap Strategic Petroleum Reserve During Crises

The U.S. has often used its Strategic Petroleum Reserve (SPR) to stabilize fuel prices during wartime or supply disruptions. The SPR, holding 415 million barrels in Texas and Louisiana caverns, has a capacity of 714 million barrels and mostly stores sour crude. During Russia’s 2022 invasion of Ukraine, President Biden released 180 million barrels over six months, the largest sale ever, coordinated with gradual replenishment. In 2019, after Houthi attacks on Saudi Arabia cut half its output, President Trump stood ready to tap the SPR but no release occurred as production recovered. During Libya’s civil war in 2011, President Obama released 30 million barrels from the SPR, coordinated with the IEA’s additional 30 million barrels, to offset market disruptions. In 1990–1991, after Iraq invaded Kuwait, President George H.W. Bush ordered two sales totaling 17.3 million barrels to support Operation Desert Storm. The SPR has consistently been used to counter supply shocks, sometimes with actual releases and other times as a strategic deterrent.