Iran War Spurs Surge in U.S. Gulf Oil Prices to 2020 Highs
Iran Conflict Pushes U.S. Gulf Oil Prices to Four-Year High
U.S., Mar 07 : Gulf Coast heavy crude grades surged sharply on Friday as the ongoing Iran conflict prompted major Middle Eastern producers to cut heavy crude output. Buyers scrambled for alternative barrels, driving prices for U.S. crude higher.
Mars Sour Crude Hits Highest Premium Since 2020
Mars sour crude, the flagship U.S. Gulf of Mexico grade favored by global refiners, traded at an $11 premium over U.S. benchmark West Texas Intermediate (WTI) on Friday, up $4 from Thursday. Just a week ago, the premium stood at $1.50. Other heavy grades, including Heavy Louisiana Sweet and West Texas Sour, also saw significant gains.
Brent Crude Surpasses $92 Amid Strait of Hormuz Disruptions
Brent crude climbed to $92.69 per barrel, its highest level since October 2023, as the effective closure of the Strait of Hormuz disrupted oil flows from the Persian Gulf. Iraq and other countries have curtailed output, while additional production cuts in Kuwait contributed to rising prices.
Asian Buyers Scramble for Alternatives
“Refiners that rely on these grades will need substitutes for lost barrels. U.S. Gulf sour and medium-heavy grades are natural replacements, and demand is surging, especially from Asia,” said Matt Smith, lead Americas oil analyst at Kpler.
Seasonal Demand and Supply Constraints Fuel Price Spike
Economist Tim Snyder of Matador Economics noted that the rise in U.S. Gulf oil prices is compounded by the seasonal shift from winter to driving season, when crude demand typically rises. “Short-term, these grades will continue to climb until the Strait of Hormuz reopens,” he added.
