Brent crude futures shattered the $100 threshold on Thursday. The global energy market is fracturing under the weight of a massive cargo squeeze across the Middle East, driven by escalating regional conflicts and the total collapse of the U.S.-Iran ceasefire.
Trading in London closed with Brent crude at $100.68 per barrel, a sudden 7% jump. West Texas Intermediate followed right behind it, surging 6.37% to hit $92.36 late Thursday night. And the driver is entirely physical. Commercial shipping companies are abandoning the region.
Vessel tracking data from Wood Mackenzie reveals an 82% collapse in Middle Eastern crude exports between January and June. Daily volume plunged from an average of 18.8 million barrels down to just 3.4 million. Traffic through the Strait of Hormuz has essentially ceased since the ceasefire breakdown on February 28.
The immediate price spike follows renewed violence in the Red Sea. Houthi rebels are actively claiming successful strikes on two Saudi oil tankers. We are watching Brent crude blow past the century mark, pushing closer to the historical peak of $126 seen earlier this year.
Regional energy infrastructure is shutting down in response. QatarEnergy formally declared force majeure on shipments to certain buyers and temporarily halted LNG production. Over in Bahrain, Bapco Energies issued a similar force majeure declaration following a direct attack on its refinery complex.
Currency Markets Crack Under Energy Strain
The fallout from this blockade extends far beyond the pump. Industrialized economies that rely heavily on imported energy are taking massive hits to their currencies.
The Japanese yen tumbled to ¥163 against the dollar this week. That marks its weakest level since 1986. When a manufacturing powerhouse like Japan is forced to buy $100-plus crude oil with a rapidly depreciating currency, the inflation gets exported globally through finished goods.
This isn’t just a shipping delay. The total erasure of over 15 million barrels per day from the global supply chain forces a fundamental repricing of industrial production costs.