WTI crude climbed 5.1% to $91.48 as a U.S. naval blockade halted Iranian oil shipments, triggering a supply crunch that slashed OPEC spare capacity forecasts and pushed U.S. gasoline prices to record levels.
WTI crude prices surged to $91.48 per barrel following the implementation of Operation Economic Outcast, which effectively reduced Iranian crude exports to zero. The market is reacting to a significant tightening of global supply, exacerbated by the EIA slashing its OPEC spare capacity forecast from 3.8 million b/d to 2.5 million b/d for 2027.
Prices rose due to a supply shock caused by the naval blockade of Iranian oil exports and a downward revision in OPEC's spare capacity.
Because China only pays upon receipt of physical cargo, the inability to transit the Strait of Hormuz prevents Iran from receiving payment or borrowing against future deliveries.
WTI crude prices surged 5.1% to $91.48 per barrel following the successful implementation of Operation Economic Outcast, a U.S.-led naval blockade that has effectively reduced Iranian oil exports to zero. The disruption has forced a downward revision in OPEC spare capacity forecasts to 2.5 million barrels per day, tightening global supply and pushing U.S. gasoline prices to record highs of $4.15 per gallon.
Unlike traditional financial sanctions, the physical blockade prevents the delivery of cargo. Because Chinese buyers typically pay only upon receipt of goods, the lack of physical transit effectively eliminates Iran's ability to generate revenue or borrow against future shipments.