Oil Punches Above $100 as Iran War Forces More Production Cuts

b7pili0dzdockqox5ct6{p{0_media_dl_1.png ICE, NymexArticle content(Bloomberg) — Oil smashed through $100 a barrel as more major Middle East producers curbed production, the Strait of Hormuz remained all but closed and the US threatened to deepen a conflict that has upended energy markets.Sign In or Create an AccountEmail AddressContinueor View more offersArticle contentBrent spiked as much as 20% to $111.04 a barrel, the highest level since July 2022, while West Texas Intermediate jumped 22%. Kuwait and the United Arab Emirates have started reducing output as storage rapidly fills up due to the closure of Hormuz. Iraq began shutting in production last week.Article contentWe apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.Article contentArticle contentThe war in the Middle East is showing no signs of abating after US and Israeli strikes on Iran more than a week ago. The halt to shipping through Hormuz — a narrow waterway that normally handles a fifth of the world’s oil — and attacks on energy infrastructure have driven up prices of crude and natural gas.Article contentTop StoriesGet the latest headlines, breaking news and columns.There was an error, please provide a valid email address.Sign UpBy signing up you consent to receive the above newsletter from Postmedia Network Inc.Thanks for signing up!A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.Article contentUS President Donald Trump weighed in on the oil spike with a late night post on his social media platform Truth Social, saying that short-term movements are a “very small price to pay” for the US, the world, and peace. He added prices will fall rapidly “when the destruction of the Iran nuclear threat is over.”Article contentMore than a dozen countries have been sucked into the fray and the conflict has stoked fears of an inflation crisis. US retail gasoline prices have jumped to the highest level since August 2024, posing a significant challenge to Trump and his party at midterm elections later this year.Article contentStill, Trump is pushing ahead with the war, and in a social media post early Saturday, said the US will consider striking areas and groups of people in Iran that were not previously considered targets. The remarks came after Iranian President Masoud Pezeshkian vowed not to back down.Article contentArticle contentIran named the son of the late Ayatollah Ali Khamenei as its new supreme leader, the semi-official Fars news agency said on Sunday, with the Islamic Revolutionary Guard Corps pledging obedience to the new leader. Meanwhile, the US State Department ordered the departure of US employees in Saudi Arabia, the New York Times report, citing anonymous officials.Article content“The psychological level of $100 oil may just be a short-term price target on its way to higher levels as the conflict drags on,” said Andy Lipow, the president of Lipow Oil Associates. “Oil production is throttled back as oil storage fills up because tankers are unable to load.”Article contentMore major energy infrastructure was threatened over the weekend, with Saudi Arabia intercepting and destroying drones heading to the 1-million barrel a day Shaybah oil field. Last week, the kingdom was forced to halt operations at the Ras Tanura refinery, the country’s biggest, and is seeking to divert barrels to its Red Sea ports for export after the Hormuz closure.Article contentRising energy prices, including for products such as gasoil, are rippling through the market. China’s government has told the country’s top refiners to suspend exports of diesel and gasoline, and South Korea is reviewing whether to introduce an oil price cap for the first time in 30 years. Article contentIn a sign of near-term tightness, Brent’s prompt spread — the difference between its two nearest contracts — widened to over $7.66 a barrel in backwardation, a bullish pattern. The gap was 62 cents a month ago.Article content“Right now, the biggest fear is still disruption to flows through Hormuz,” said Haris Khurshid, chief investment officer at Karobaar Capital LP in Chicago. “Production shut ins matter but the market really worries about barrels not being able to move.”Article content—With assistance from Nathan Risser.Article contentTrending Gold Slumps as Oil Surge Stokes Fears of Higher Interest Rates PMN Business Garry Marr: Why your house is still costing you, even if you've paid it off Personal Finance Bank of Canada governor warns of growing risks to financial stability Economy Here are 5 things worried investors can do as the Iran war plays out Investor Beer, wine sales fall even more, putting tax revenues on the rocks, but one boozy drink is on the rise Retail & Marketing Share this article in your social networkCommentsYou must be logged in to join the discussion or read more comments.Create an AccountSign in Join the Conversation Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information. Gold Slumps as Oil Surge Stokes Fears of Higher Interest Rates PMN Business Garry Marr: Why your house is still costing you, even if you've paid it off Personal Finance Bank of Canada governor warns of growing risks to financial stability Economy Here are 5 things worried investors can do as the Iran war plays out Investor Beer, wine sales fall even more, putting tax revenues on the rocks, but one boozy drink is on the rise Retail & Marketing