Kuwaiti oil surges near $100 per barrel amid escalating Middle East tensions

Kuwait Petroleum Corporation reported that the price of Kuwaiti crude oil surged sharply during the first week of March as geopolitical tensions intensified across the Middle East.

On Thursday, March 5, Kuwaiti oil climbed to $92.81 per barrel, marking a significant increase of $8.57 from the previous day’s price of $84.24. The upward trend continued the following day, with prices rising another $5.67 to reach $98.48 per barrel on Friday, March 6.

Global benchmark prices also experienced strong volatility. Brent Crude edged down slightly by four cents to settle at $83.97 per barrel on Thursday but surged to $92.69 by Friday. Meanwhile West Texas Intermediate (WTI) rose $4.21 to $78.87 per barrel on Thursday before jumping more than 12% to $90.90 per barrel on Friday.

Strait of Hormuz tensions drive volatility

The sharp rise in oil prices has been largely driven by escalating regional tensions following military strikes involving the United States, Israel, and Iran on February 28.

The conflict has heightened fears over the security of the Strait of Hormuz, a narrow waterway through which roughly 20 million barrels of oil per day, about 20% of global supply, pass.

Iran has warned against vessel passage through the strait, effectively halting much of the shipping traffic in the area and raising concerns about global energy supply disruptions.

Energy infrastructure under threat

The regional conflict has also impacted major energy facilities. Drone and missile strikes have targeted several sites across the Gulf, including a fire at the Ras Tanura Refinery in Saudi Arabia, a temporary shutdown at the Ras Laffan Industrial City in Qatar, and operational disruptions at Jebel Ali Port in the United Arab Emirates following a fire caused by an aerial interception.

Kuwait reduces production

As a precaution, Kuwait reduced oil and refinery production on Saturday, March 7, as part of what officials described as a business continuity strategy.

The decision was also driven by storage concerns. With tankers unable to safely exit the Gulf due to the disruption in the Strait of Hormuz, oil storage facilities in producing countries are approaching capacity.

Similar measures are being taken elsewhere in the region. In Iraq, authorities have begun shutting down operations at the Rumaila Oil Field after running out of storage space for crude that cannot currently be shipped.

Analysts from major financial institutions warn that if the disruption continues for several weeks, global oil prices could exceed $100 per barrel, highlighting the critical importance of maintaining export routes in the Gulf.