KUWAIT CITY, Mar 28 (V7N) – The price of Kuwaiti crude oil witnessed a dramatic spike on Saturday, surging by $8.10 to reach $118.93 per barrel, according to the state-run Kuwait News Agency (KUNA). This sharp increase reflects the growing volatility in global energy markets as the conflict between U.S.-Israeli forces and Iran enters its second month.

The "Chokepoint" Crisis

The primary driver behind this price surge is the near-total disruption of maritime traffic through the Strait of Hormuz.

  • Strategic Importance: The Strait is the world's most vital energy artery, carrying approximately 21 million barrels of oil per day—roughly 21% of global petroleum liquid consumption.

  • Security Threats: Following the outbreak of war on February 28, 2026, Iran has effectively throttled transit through the waterway. The physical risk of missile and drone attacks, coupled with a record-breaking surge in war risk insurance for tankers, has brought commercial traffic to a virtual standstill.

  • Global Shortfall: The International Energy Agency (IEA) reports that oil flows through the Strait have plunged from 20 million barrels per day (mb/d) to just a fraction of that amount, forcing major producers like Kuwait, Iraq, and the UAE to curtail production as storage tanks reach full capacity.

Wider Market Impact

The Kuwaiti price jump mirrors a broader trend across global benchmarks.

  • Brent Crude: The global benchmark was trading near $120 per barrel late Friday following reports of Israeli strikes on Iranian nuclear facilities and retaliatory Houthi missile launches from Yemen.

  • Economic Ripple Effects: The Organization for Economic Cooperation and Development (OECD) warned today that if the Strait remains closed through April, global inflation could rise by an additional 1.2%, significantly impacting net-importing nations in Asia and Africa.

  • Fertilizer Crisis: Beyond oil, the blockage is also affecting nearly one-third of the world’s fertilizer trade, threatening global food security and farming cycles for the upcoming season.

Emergency Responses

To mitigate the impact, IEA member countries recently agreed to an unprecedented release of 400 million barrels from strategic petroleum reserves. However, energy analysts warn that without a diplomatic resolution to the conflict or a secure reopening of the Strait, these reserves serve only as a "temporary buffer" against a much deeper global energy crisis.

END/SMA/AJ