Hormuz Disruption Keeps Oil Market on Edge with Volatile Price Swings

The oil market remains volatile due to the ongoing conflict in the Middle East and disruptions in the Strait of Hormuz. Analysts say refined fuels are under greater pressure than crude, with Brent crude prices jumping over 13% after the US-Israeli siege against Iran on February 28.

Jim Burkhard, head of global energy crude oil research at S&P Global, notes that surprises like the Hormuz closure shake the market. Bob McNally, president of the Rapidian Energy Group and a former White House energy adviser to George W. Bush, says the market is grappling with an unexpected scenario.

The Strait of Hormuz handles around 20 million barrels of crude oil per day, making its disruption a significant blow to global energy flows. JPMorgan Chase analysts estimate that the closure has cut volumes by about 12.6 million barrels per day.

Despite this, Brent prices have averaged $94 a barrel since the conflict began, staying below the $150-a-barrel level some experts had predicted. Analysts say the market still believes the crisis may be resolved soon, despite repeated military escalations and conflicting signals from Washington.