On October 26, 2024, the global energy market experienced significant turbulence as West Texas Intermediate (WTI) crude oil prices surged past $100.5 per barrel, reaching their highest level in over a year. This notable increase is widely attributed to the escalating military conflict in the Middle East, which has paralyzed the logistics system of the crucial oil transport route—the Strait of Hormuz—triggering a chain reaction in global fuel supply.
During the early trading session, the WTI front-month contract quickly breached the psychological barrier of $100.5, with a daily increase of 8.7%. This movement followed reports of attacks on several key oil and gas facilities, including damage to export terminals and inter-regional pipelines. Traders responded swiftly, with the daily trading volume of WTI futures soaring to more than three times the average of the past 30 days, reflecting heightened market awareness of supply disruptions and a surge in hedging demand.
Analysts at S&P Global Commodity Insights noted that this round of price volatility is not purely driven by speculation but is based on real supply risks. Historical experience shows that similar situations occurred during the 2019 attacks on Saudi Aramco facilities, but the current situation is more complex—multiple oil-producing countries are facing simultaneous attacks, leading to widespread disruptions in transportation networks and creating unprecedented logistical challenges.
The conflict began with initial attacks on minor production facilities on October 15 and has since spread to major export ports by October 22, forcing several large terminals to suspend operations. Consequently, shipping companies have universally increased war risk surcharges, raising transportation costs by $3 to $5 per barrel, further driving up prices at the fuel terminal.
According to data from the International Energy Agency (IEA), the daily crude oil production of affected countries has collectively declined by over 2 million barrels, accounting for about 2% of global daily consumption. Meanwhile, the U.S. Energy Information Administration (EIA) reports that global crude oil inventories have fallen to their lowest level in five years, leaving the market with almost no buffer to cope with this shock.
The impact of this supply chain disruption has far exceeded the crude oil market itself, gradually transmitting to downstream sectors such as refined oil, aviation fuel, and chemical raw materials, with fuel prices facing renewed upward pressure in various regions worldwide.