Crude oil futures climbed above $100 per barrel on Friday as major Middle East producers reduced output due to blocked exports through the Strait of Hormuz. The surge reflects acute supply constraints and escalating geopolitical risk.
- Oil futures (CL=F) rose to $102.40 per barrel, exceeding $100 for the first time since 2023.
- Gulf Arab producers reduced output by 1.8 million barrels per day collectively.
- Strait of Hormuz export access remains blocked due to regional military tensions.
- Storage capacity at key Gulf terminals is nearing full capacity, forcing production cuts.
- Volatility index (^VIX) climbed to 28.7, reflecting heightened market risk.
- ExxonMobil (XOM) shares gained 3.2% on improved energy sector sentiment.
Oil prices breached the $100-per-barrel threshold on Friday, with the global benchmark CL=F reaching $102.40 amid coordinated production cuts by Gulf Arab states. The move follows a sharp decline in export capacity after the Strait of Hormuz—critical for over 20% of global oil shipments—became effectively inaccessible due to regional military escalation. Producers including Saudi Arabia, the UAE, and Kuwait have begun reducing output by approximately 1.8 million barrels per day combined to manage overflowing storage facilities. The situation has triggered a supply shock that has not been seen since 2022. The VIX index, a measure of market volatility, spiked to 28.7, signaling heightened investor anxiety. Energy giants such as ExxonMobil (XOM) saw their stock rise 3.2% on the anticipated boost to earnings, while refining and transportation sectors face rising input costs. Global inflation expectations have rebounded, with the U.S. 10-year Treasury yield rising to 4.87%. The disruption underscores the fragility of global oil supply chains in the face of regional conflict, with no clear timeline for resumption of shipments through the strait.