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Oil benchmarks eased after U.S. demand indicators disappointed, trimming near-term upside; at the same time, reports of possible diplomatic engagement and concentrated long positions prompted rapid repricing that amplified intraday volatility. Geopolitical tensions and supply frictions still set a floor under prices, leaving the market range‑bound and sensitive to event-driven spikes.

Oil benchmarks rose after a U.S. carrier strike group and multi-day CENTCOM aviation exercises were deployed to the Middle East amid stern presidential warnings to Tehran; open-source satellite imagery and commercial trackers showed an expanded U.S. force posture. Markets priced a modest supply-and-transit risk premium—pushing Brent toward the high-$60s per barrel and U.S. crude near $63—while insurers and shippers began contingency planning.

An intense Arctic cold snap has forced widespread shutdowns at Texas oil fields and refineries, cutting crude output and refinery throughput and straining fuel distribution. The immediate effect is localized supply tightness and higher wholesale prices, while longer-term risks center on infrastructure resilience and inventory management ahead of spring demand.
Oil plunged after US signals of direct engagement with Iran rapidly removed the short‑term geopolitical premium that had pushed crude higher; the unwind was amplified by a cross‑commodity selloff and position-driven liquidations that could extend volatility if key technical levels fail. While physical balances and episodic supply disruptions had supported earlier price gains, the market’s swift repricing shows positioning — not a durable supply shock — was the primary near‑term driver.
Markets and policymakers currently treat a moderate Middle East flare-up as a short-lived disturbance, but a targeted hit to production sites or a choke-point blockade would remove physical barrels and could sustain higher oil prices. That dynamic would feed into persistent inflation, push central banks toward tighter policy, and slow growth—especially in energy-importing and financially vulnerable economies.
Global crude shipping costs have jumped sharply into 2026 as sanctions, rerouted flows from Venezuela and Russia, and extended voyage distances tighten tanker availability. The squeeze has pushed benchmark freight indicators and VLCC charter fees to multi-year highs, benefiting owners while keeping refiners and supply chains under pressure.
Traders and refiners say heightened enforcement and commercial avoidance of Russian and Iranian cargoes have shrunk the pool of readily tradable barrels, pushing demand onto unconstrained grades and lifting benchmark crude. The dislocation is amplified by rising freight and insurance costs as tonnage is repurposed and voyages lengthen, boosting returns for shipowners and traders while raising feedstock costs for refiners.

Risk appetite cooled as renewed U.S.‑Iran military signaling pushed crude and safe-haven assets higher before a sharp intra‑day reversal; that geopolitics-driven repricing combined with Fed‑related institutional uncertainty, stronger-than-expected U.S. macro prints and choppy corporate guidance to produce a headline‑driven, highly selective market session.