Market News

(Bloomberg) -- Brent briefly jumped back above $100 a barrel after the Iran war led to more shipping turmoil in the Middle East and China tightened fuel export curbs to cope with the fallout from the conflict.

The global oil benchmark surged as much as 10% to $101.59 a barrel, while West Texas Intermediate rose to near $96, before paring gains. Two tankers were struck in Iraqi waters and Oman temporarily cleared ships from its key export terminal outside of the Strait of Hormuz, underscoring the widening threats to energy supply and overshadowing a record reserves release to try and cool prices.

The International Energy Agency warned on Thursday that the current supply disruption is the largest in the history of the global oil market, underscoring days of wild price moves. Those swings are also being exacerbated by financial flows from options markets to exchange-traded funds.

In further signs of strain, Chinese refiners have begun canceling agreed refined fuel export cargoes, including gasoline and diesel. The country’s top processors were told last week to stop signing new contracts, and the latest directive is a step up from the earlier guidance.

The crucial Strait of Hormuz, through which a fifth of global oil typically flows, remains effectively closed and has led to major Gulf producers cutting output. Prices of natural gas and products such as diesel have surged along with crude, with Brent and WTI spiking toward $120 a barrel on Monday before pulling back. The market has been whiplashed by dramatic fluctuations this week.