The front month Nymex WTI contract jumped by 8pc today with ship traffic through the strait of Hormuz nearly grinding to a halt as the US and Israel continued to exchange fire with Iran.
April Nymex WTI traded up by $5.77/bl to near $77/bl as of 11am ET on Tuesday,
Prices have so far surged by more than $10/bl, or 15pc, in the first two sessions since the conflict began over the weekend. Most vessel owners are unwilling to transit the strait — a key chokepoint for oil and LNG exports from the Mideast Gulf — forcing some upstream production offline.
Iraq has suspended crude production from the northern Kirkuk region as a precaution against the escalations in drone and missile attacks linked to the US–Israel conflict with Iran, Iraqi oil ministry sources told Argus. Production levels at Kirkuk were averaging 220,000 b/d before the suspension, the source said.
London-listed Gulf Keystone said it has stopped production at its Shaikan field in the semi-autonomous Kurdistan region because of safety concerns linked to the widening conflict. Shaikan, one of Kurdistan's largest fields, produced just over 41,500 b/d in 2025.
Crude supply from the Mideast Gulf is being constrained by the de facto closure of Hormuz, as soaring freight rates and higher war-risk premiums deter shipowners from transiting. Iran claims it has "closed" the strait and intends to "burn" any ship that tries to pass through.
US attacks in the region may have compromised Iran's ability to close the strait using those means, however.
"The Iranian regime has harassed and attacked international shipping in the Gulf of Oman for decades," the US' Central Command (Centcom) said in a statement. "Those days are over."
Even so, only three tankers were recorded sailing through the waterway on 1 March, according to the Joint Maritime Information Center. This compares with 50 tankers on 28 February, representing a 94pc drop in tanker traffic.
