Oil markets posted their strongest weekly performance of the conflict as the Iran-Israel war entered its fourth week with the Strait of Hormuz functionally closed and strikes continuing across regional energy infrastructure. Brent crude climbed above $108 per barrel, gaining over 5% this week, while regional refineries reported significant disruptions from ongoing attacks.
Kuwait announced shutdown of multiple units at Al Ahmadi Refinery following drone strikes, compounding Middle East refining capacity losses alongside production facility damage in Qatar and Iran. Saudi Arabia intercepted incoming missiles, highlighting persistent military threat to Gulf oil and gas infrastructure. The Islamic Revolutionary Guard Corps confirmed continued missile production capacity, signaling escalation risks remain elevated.
For tanker markets, the extended Hormuz closure and continued regional strikes maintain structural support for crude tanker rates. VLCC operators benefit from forced rerouting around the Cape of Good Hope, extending voyages and reducing annual vessel utilization. Refined product tankers face volatility from refinery downtimes and allocation disruptions. Insurance premiums remain elevated, and charterers price in ongoing risk. Spot rates for crude VLCC remain strong despite temporary price retracements, reflecting persistent supply-side constraints and logistical complexity.