Global energy markets are reeling as oil tracks toward its most significant weekly gain in four years, fuelled by escalating conflict in the Middle East.
Brent crude has rallied 16% this week as producers and shippers struggle to navigate a wave of regional disruption.
Although prices retreated toward $84 a barrel on March 6—following signals from US President Donald Trump of "imminent action" to curb costs and a loosening of Treasury restrictions on Indian purchases of Russian supply—West Texas Intermediate remains elevated near US$80.
The geopolitical landscape remains volatile; Iranian Foreign Minister Abbas Araghchi told NBC News that Tehran is prepared for a potential US ground invasion, while Israel has launched a fresh wave of strikes against Iranian targets.
Concurrently, Saudi Arabia and Qatar reported intercepting drone and missile attacks, further heightening supply fears.
Goldman Sachs warned that a total closure of the Strait of Hormuz—a transit point for 20% of global flows—could send prices spiralling, despite maintaining a base-case forecast of $76 a barrel for the second quarter.
The strain is being felt acutely across Asia as Chinese authorities have ordered major refiners to suspend diesel and gasoline exports to protect domestic stockpiles.
Over in Japan, industry leaders have requested the government release oil from strategic reserves to maintain stability.