Crude oil price surges to $115 on Hyperliquid as Kuwait, UAE slash production

Crude oil price continued rising this weekend as the war in Iran continued, pushing some key countries to slash their output. Hyperliquid futures show that West Texas Intermediate (WTI) soared to $115 on Sunday, much higher than Friday’s close of $90. Brent, the global benchmark, rose to $117, the highest level since 2022.

Crude oil price jumps as top countries slash output 

Energy prices have soared in the past few weeks as market participants reacted to the ongoing war in Iran.

This war escalated this weekend, even as Donald Trump asked Iran to surrender unconditionally. Iran has vowed to continue fighting for as long as it takes.

Crude oil prices continued rising after the United Arab Emirates (UAE) and Kuwait announced that they would slash their output because of the near-closure of the Strait of Hormuz.

Kuwait started cutting production by 100,000 barrels of oil per day, a number that will continue increasing as that war continues.

The UAE, which pumps 3.5 million barrels of oil per day, has also reduced supply and is now focusing on using export capacity that bypasses the Strait of Hormuz.

Other countries like Iraq, Saudi Arabia, and Qatar have also slashed production this year. Therefore, analysts believe that the ongoing crisis will likely exhaust all oil and fuel in storage within weeks or days.

The crisis also escalated after Israel bombed key energy infrastructure in Iran during the weekend. In reacting, Iran targeted Haifa, a major refinery in Israel.

Therefore, the most likely scenario is where crude oil prices continue soaring as long as the war continues. This is possible as Polymarket data shows that odds of a ceasefire happening soon have continued falling.

Odds of a ceasefire happening this month tumbled to 24%. Odds of this ceasefire happening in April, May, and June dropped to 47%, 61%, and 69%, respectively.

On the positive side, a reversal in the oil market will likely happen once the war ends or talks begin. While odds of a ceasefire have fallen, there is a likelihood that Trump will want to end this war soon because of its unpopularity among voters.

Energy stocks are soaring 

The ongoing war in Iran has led to a slump in US markets. Data shows that the Dow Jones Index dropped by 455 points on Friday. Similarly, the S&P and the Nasdaq 100 indices dropped by 90 and 365 points, combined.

However, top energy stocks have jumped as investors predict bumper revenue and profits in the near term.

Marathon Petroleum's stock price soared by 10% last week, while APA Corporation, Valero Energy, Phillips 66, and EOG Resources jumped by over 5%.

Other top gainers were companies like Diamondback Energy and ConocoPhillips.