Oil closes above $100 for second straight day

Crude oil prices closed above $100 on Friday (March 13) for a second consecutive day, as markets remained unconvinced by US measures aimed at finding ways to lower oil prices during the Iran-US war.

CNBC reported that Brent crude closed above $100 on Friday as the Iran war entered its third week, with oil shipments through the Strait of Hormuz still completely disrupted.

Brent futures rose 2.67%, or $2.68, to settle at $103.14 a barrel. US West Texas Intermediate (WTI) crude gained 3.11%, or $2.98, to close at $98.71 a barrel.

Prices continued to rise even as the United States and its allies rolled out several measures to contain energy costs. The International Energy Agency (IEA) agreed to release 400 million barrels of emergency reserves, marking the largest such action in history.

The United States has also granted India a 30-day waiver to purchase sanctioned Russian oil. President Donald Trump is meanwhile considering easing restrictions under the Jones Act, which requires US ships to carry goods between domestic ports, including oil and gas, in an effort to reduce costs.

Investors have continued to monitor developments in the Middle East closely. Overnight, Trump signalled that the conflict was unlikely to end soon.

“We have superior firepower, unlimited ammunition, and plenty of time,” he said, before urging his followers to “watch what happens” to Iran’s regime on Friday.

Oil prices posted another weekly gain, with Brent futures rising about 10% this week, following a 27.9% surge last week — the biggest weekly jump in oil prices since the Covid-19 outbreak in 2020. WTI futures, which recorded their strongest weekly rise since 1983 last week, ended this week more than 8% higher.

On Friday morning, Axios reported that Trump had claimed in talks with G7 leaders earlier this week that Iran was “about to surrender”. A day later, Iran’s new supreme leader, Mojtaba Khamenei, declared in a message broadcast on state television that the country would continue fighting.

Several foreign vessels in or near the Strait — a vital oil shipping route that has been blockaded amid the escalating conflict — were attacked this week. The incidents have added to fears that a prolonged war could have wider consequences for the global economy.

“Prepare for oil at $200 a barrel, because oil prices depend on regional stability, and you have destabilised it,” Ebrahim Zolfaghari, spokesman for Iran’s military command, said on Wednesday, according to Reuters.

In a note on Friday morning, Emmanuel Cau of Barclays said investors were becoming increasingly uneasy after initially assessing the conflict as likely to be short-lived.

“Investors are still putting faith in Trump’s strategy, so global equity markets have not fallen as sharply as in previous oil crises,” he said. “But concerns are rising by the day, and the longer the Strait of Hormuz remains closed, the more markets will slide into inflation and stagnation. Watch central banks next week as monetary tightening intensifies.”

Amjad Bseisu, chief executive of British petroleum producer EnQuest, told CNBC’s Squawk Box Europe on Friday that the oil market had “never seen anything this severe before”.

“Every day that we see delays, another 20 million barrels of oil disappear from the market, and that has had an impact and will continue to have an impact,” he said.

“I think this crisis could be longer and more severe than previous ones, and it may be something we need to view with more downside risk than upside.”

Bseisu noted that the last comparable drop in global oil supply occurred during the Arab embargo in the 1970s.

“At that time, oil prices rose fourfold. This time, I think prices are up 50%, but I believe this will be a long-term trend,” he told CNBC.