-- Brent crude futures surged on Wednesday, hovering near its highest level since early April following a historic exit by the UAE from OPEC, combined with a persistent dual naval blockade of Strait of Hormuz.
The Brent futures contract gained 1% to $112.36 per barrel, taking the contract to its highest since late March. Murban closed at $106.70 on April 28 and was not trading as of the time of publishing this oil price update.
The surge follows a historic blow to the global oil cartel as the UAE officially announced its withdrawal from OPEC, effective May 1.
Energy Minister Suhail Al Mazrouei confirmed the move was a "policy-driven evolution" aimed at bypassing production quotas to rebuild global reserves and monetize the country's expanded capacity.
Rystad Energy strategists warn that UAE's exit, combined with these vanishing stockpiles, raises critical questions about OPEC's future ability to manage an increasingly fractured and undersupplied global market.
The current supply outlook remains dire as the Strait of Hormuz remains virtually shuttered.
US President Donald Trump reportedly instructed aides Tuesday to prepare for an "extended blockade" of Iran, even as he claimed on social media that the Tehran regime is in a "state of collapse" and seeking to reopen the waterway.
Adding to the bullish momentum, data from the American Petroleum Institute revealed that US crude inventories plunged by 1.79 million barrels for the week ended April 24.
The oil market now awaits the US Energy Information Administration's petroleum inventory report, scheduled for release on Wednesday.
"Traders now focus on the next steps in peace talks and today's US inventory report for further signs of how quickly US stockpiles are falling amid robust export demand," Saxo Bank analysts said.