Dubai Crude Oil Price Breaks Through $150, Middle East Gunfire "Shockwave" Still Transmitting

(Stock photo)

Southern Finance, 21st Century Business Herald Reporter Wu Bin reports

As Israel kills an Iranian senior official, Iran has attacked energy infrastructure across the Middle East, causing oil prices to continue rising. On March 17, WTI crude futures increased by 2.9%, to $96.21 per barrel; Brent crude futures rose by 3.2%, to $103.42 per barrel.

On the evening of March 18, Beijing time, Iran’s South Pars petrochemical facilities were attacked by the US and Israel. Oil prices briefly plunged but then rose again, with Brent crude surging over 3% at one point, breaking back above $100 per barrel.

The increase in Middle Eastern oil prices was even more dramatic. S&P Global Platts reported that the spot assessment price for Dubai crude loading in May reached a record $157.66 per barrel on March 17, surpassing the 2008 high of $147.50 set by Brent futures. Meanwhile, Oman crude futures hit a new high of $152.58 per barrel on the 17th.

Both Dubai and Oman crude prices are trading above $150 per barrel, highlighting the severity of oil shortages in the Gulf region. Middle Eastern oil prices are directly affected by supply disruptions and more accurately reflect marginal supply shortages than Atlantic basin oil prices.

The “shockwave” of Middle Eastern conflict continues to propagate

Despite trade stagnation due to Iran’s situation, benchmark Middle Eastern crude prices have soared to historic highs, becoming the most expensive in the world. These benchmark prices are used to price millions of barrels of Middle Eastern oil sold to Asia. The rising prices are increasing costs for Asian refiners, forcing them to seek alternatives or further cut production in the coming months.

JPMorgan Commodity Chief Natasha Kaneva pointed out that there is a clear disconnect between international benchmark crude prices and the Middle East’s geographic location amid supply disruptions. Brent and WTI are benchmarks at opposite ends of the Atlantic basin, but the current shocks are concentrated in the Middle East.

The typical voyage from Gulf Cooperation Council (GCC) countries to Asia takes about 10 to 15 days, while shipments passing through the Suez Canal to Europe take 25 to 30 days, and rerouting around the Cape of Good Hope takes 35 to 45 days. Therefore, disruptions in Gulf flow will impact Asian markets sooner and more intensely, while Atlantic benchmarks like Brent and WTI will have a longer buffer due to inventory overhangs and slower supply adjustments. The US, with a daily crude output of over 13 million barrels, is less affected.

In this context, the apparent price stability of Brent and WTI may not indicate sufficient global supply but rather reflect temporary buffers created by regional inventory surpluses, benchmark composition, and policies like releasing strategic reserves.

Short-term supply disruptions remain unresolved

In the short term, there are no signs of an end to the Middle East conflict.

According to CCTV News, Iran’s Army Commander Amir Hatami said on the 18th that Iran will respond “decisively” to the assassination of National Security Council Secretary Ali Larijani, “making enemies regret.” Iran’s side stated that Hatami declared Iran will seek revenge for Larijani and other victims, and that “such criminal acts will never hinder Iran’s defense of independence, freedom, territorial integrity, and regime.”

According to data from global commodities monitoring firm Kpler, as of the week ending March 15, the combined oil, condensate, and refined fuel exports from eight Middle Eastern countries—Saudi Arabia, Kuwait, Iran, Iraq, Oman, Qatar, Bahrain, and the UAE—averaged 9.71 million barrels per day, down 61% from 25.13 million barrels per day in February.

Operational oil transportation routes include exports from Saudi Yanbu port on the Red Sea, Oman’s maritime exports, and the UAE’s Fujeirah port. However, Fujeirah’s loading operations have been repeatedly interrupted in recent days due to drone attacks.

Fawad Razaqzada, senior strategist at CIBC World Markets, told reporters that as the conflict in the Middle East enters its third week, the Strait of Hormuz has become a key focus, with oil risk skewed upward. The Strait of Hormuz is one of the world’s most critical energy chokepoints, and the scale of supply disruption cannot be ignored. If shipping through the strait is halted long-term, it could trigger global energy supply concerns and push oil prices higher again.

Even if the Strait of Hormuz reopens, immediate relief is unlikely. According to the International Energy Agency, since the conflict began, about 10 million barrels per day of Middle Eastern production have been shut in, and restoring these volumes could take weeks or even months.