The Commodities Feed: Persian Gulf disruptions hitting upstream oil production in Oil & Companies News 04/03/2026 Energy- Asian LNG prices surge further Oil prices surged above US$85/bbl yesterday, reaching their highest level since July 2024, amid growing concerns over oil flows through the Strait of Hormuz. There’s also growing unease about the damage to energy infrastructure resulting from attacks. However, the market gave back some of its gains to settle at US$81.40/bbl after President Trump said the US will ensure vessels can navigate the Strait of Hormuz and offer naval escorts if needed. The promise of such guarantees comes as insurers are cancelling war risk coverage for vessels moving through the Strait of Hormuz. This is welcome news, but clearly it won’t happen overnight. Naval escorts would be helpful, but again, this effort will take time. Naval escorts will be sitting ducks to Iranian attacks. So, the US may choose to wait before escorting vessels until it gauges that Iran’s ability to attack has been degraded. In addition, China is calling for the uninterrupted flow of energy shipments through the Strait of Hormuz. With the Iranian regime effectively fighting for its survival, it may choose to ignore China’s calls. The disruption to oil flows through the Strait is starting to affect oil flows further upstream. There are reports that Iraq has started shutting in production at the Rumaila field, the country’s largest, and at West Qurna 2, with 1.2m b/d going offline. The risk of further reductions in the coming days remains. Capacity constraints are the issue for Iraq, with storage tanks filling up, and a lack of available tankers in the Persian Gulf. Obviously, the longer disruptions persist, the more upstream production shut-ins we will see from the region. This highlights a key issue regarding OPEC’s spare production capacity, with the bulk of it located in the Persian Gulf. So, it’s of little help to the market amid Strait of Hormuz disruptions. Clearly, stronger OPEC output would help the market rebuild inventories once oil flows resume. Middle distillate prices continue to see larger movements. ICE gasoil has now broken above US$1,000/t, while the crack is trading above US$41/bbl. There are sizeable volumes of refined products that pass through the Strait of Hormuz, while disruptions to crude flows also mean refiners elsewhere may reduce run rates. In addition, if energy concerns continue to grow, we wouldn’t rule out some countries imposing export limits on refined products, which could add to tightness. The gas market continues to strengthen. TTF settled almost 22% higher yesterday, leaving front-month futures a little over EUR54/MWh. Moves in Asia have been even more aggressive, with the JKM-TTF spread surging to more than US$6/MMBtu yesterday. This makes sense, given that Asian buyers will be most affected by the disruption to Persian Gulf LNG flows; more than 80% of LNG from the region ends up in Asia. As a result, Asian buyers have had to enter the spot market to secure alternative supply. This will increase competition between Asia and the EU for LNG cargoes. It’s a concern for Europe, where gas storage is much tighter than usual at just under 30% full. The US natural gas market is better insulated from developments in the Middle East. The US is basically exporting LNG at capacity, so it’s not going to lead to any additional tightness in the US balance. If anything, stronger crude oil prices could see increased