Record Oil Rally Lifts Energy ETF 0.3% After 2M BPD Cuts
West Texas Intermediate crude futures jumped over 7% on Friday to above $89 a barrel, marking the largest weekly gain since 1983 as the Strait of Hormuz closure triggered physical production shutdowns. Energy Select Sector SPDR ETF rallied 0.3% as Iraq and Kuwait cut over 2 million barrels per day and QatarEnergy halted LNG exports.
1. Record Weekly Crude Rally
West Texas Intermediate futures soared more than 7% on Friday to exceed $89 a barrel, delivering the largest weekly gain ever recorded since trading began in 1983. The surge was driven by Iran’s effective closure of the Strait of Hormuz, tightening global oil flows and sparking a historic price spike.
2. Production Shutdowns Escalate
Iraq has already shut in output at three major fields, and Kuwait announced cuts once storage capacity was reached, together removing over 2 million barrels per day from the market. QatarEnergy suspended operations at the world’s largest LNG export facility after a drone attack, adding natural gas to the commodities under supply threat.
3. Energy ETF Outperforms
The Energy Select Sector SPDR ETF was the only S&P 500 sector trading in positive territory on Friday, rising 0.3% while broader indices plunged. Heightened volatility sent the VIX nearly 10% higher as stocks in other sectors suffered steep declines amid geopolitical tensions.
4. Ceasefire Odds Remain Low
Prediction markets assign just a 12% chance of a U.S.-Iran ceasefire within a week, rising to 28% by month-end and 48% by April 30. The low probability of de-escalation suggests supply risks and elevated oil prices could persist in the near term.