Just been tracking the crude oil moves and the numbers are pretty wild right now. WTI April futures jumped 8.51% on Thursday hitting a 19.5-month high, while gasoline surged 6.20% to a 1.75-year peak. The driver is pretty straightforward—Middle East tensions have completely disrupted global energy flows, and we're seeing real supply shock consequences play out.

The Strait of Hormuz being effectively closed is the main story here. Iran's Revolutionary Guard warned ships they could face missile or drone attacks, which basically halted most energy shipments from the Persian Gulf. That passageway handles roughly a fifth of world oil, so when it goes dark, you feel it immediately. Saudi Arabia and Iraq are literally stockpiling crude because they can't export—storage tanks are filling up fast. Kayrros reported four of six tanks at Saudi's Ras Tanura are already full.

The infrastructure damage is adding pressure too. A drone strike hit UAE's Fujairah oil hub on Tuesday, one of the Middle East's biggest storage centers. Then Saudi had to shut down Ras Tanura, their largest refinery processing 550,000 barrels daily. These aren't small disruptions—they're major chokepoints in global supply flows.

Goldman Sachs put a real number on this: they're pricing in an $18 per barrel risk premium based on what a six-week tanker halt through Hormuz would mean. That's substantial. Meanwhile, Ukraine keeps hitting Russian refineries and tankers, which is keeping Russian crude off the market too. Over seven months, Ukrainian strikes have targeted at least 28 Russian refineries.

Now here's where it gets interesting—there are some offsetting factors. OPEC+ is actually boosting output by 206,000 barrels daily in April, trying to restore production cuts from early 2024. And Venezuelan exports jumped to 800,000 bpd in January from 498,000 in December. Plus floating storage of Russian and Iranian crude has ballooned to 290 million barrels, 50% higher than a year ago due to blockades.

The EIA data from Wednesday showed US crude inventories are 2.7% below the seasonal five-year average, which is bullish. US production stayed flat at 13.696 million bpd. Active oil rigs dropped to 409, down from recent highs of 627 back in December 2022.

What's interesting is watching how these competing flows play out. You've got real supply disruptions from geopolitics pushing prices up, but you've also got production increases and storage buildups working the other way. The market's clearly pricing in the geopolitical risk premium right now, and until we see clarity on the Middle East situation, that premium probably sticks around. Energy prices staying elevated for a while seems like the base case.