US deepwater sour Mars crude surged by roughly $17.50/bl to near $105/bl and returned to a premium to the Cushing light sweet benchmark after fresh threats on the strait of Hormuz.
The Argus April Mars assessment was $104.73/bl on Thursday, rising by $17.48/bl from the prior day. The Argus weighted-average premium rose by $9/bl to Domestic Sweet from parity on Wednesday. Trade moved as high as $10/bl before ending the day at a $5/bl premium.
Meanwhile, the April Nymex light sweet crude futures contract climbed by $8.48/bl to settle at $95.73/bl.
Prices had eased over the prior two sessions despite three vessels in the Mideast Gulf being attacked on Wednesday, pressured by 10 March comments by US president Donald Trump suggesting the US-Israel war on Iran could end soon, signaling a potential end to Middle East supply disruptions.
But prices spiked again after Iran's new supreme leader, Mojtaba Khamenei, vowed to keep the strait of Hormuz closed in a written message delivered via state news outlets. Only a handful of oil tankers have passed through the strait since the 28 February start of the US-Israel war against Iran and Tehran's retaliatory attacks.
US medium sour grades have received more supported from the war than lighter grades, in part because the Middle East typically exports similar-quality crude to the US Gulf coast. Additionally, grades with better distillate yields have seen their values particularly boosted by a tight global market for jet fuel and diesel as those are typically exported from the Middle East in high quantities.
Mars' volume-weighted average differential reached a six-year high of nearly $13/bl on 9 March.
Values could fall again soon, though, as President Trump has authorized a 172mn bl drawdown of crude from the US Strategic Petroleum Reserve over the next four months as part of the IEA's coordinated release of 400mn bl of oil globally.
