Oil prices surged about 3% on Tuesday as a severe winter storm disrupted U.S. crude production and briefly drove Gulf Coast crude exports to zero, tightening near-term supply expectations. Brent crude futures settled up $1.98, or 3.0%, at $67.57 a barrel, while U.S. West Texas Intermediate gained $1.76, or 2.9%, to settle at $62.39.
U.S. producers lost as much as 2 million barrels per day, or roughly 15% of national output, over the weekend as freezing temperatures strained energy infrastructure and power grids. The weather-related disruptions pushed futures higher as traders priced in potential inventory drawdowns if cold conditions persist. Analysts said short-term risks remain skewed to the upside given the scale of the outages.
Crude and liquefied natural gas exports from U.S. Gulf Coast ports fell to zero on Sunday amid the extreme cold, according to ship-tracking data, before rebounding sharply on Monday once ports reopened, with flows returning above seasonal norms. Even so, the temporary export halt added to concerns about prompt supply tightness.
Supply risks were compounded by slower-than-expected recovery at Kazakhstan’s Tengiz oilfield. Sources said the field is likely to restore less than half of its normal production by February 7 following a fire and power outage, keeping pressure on global balances. While Kazakhstan’s main export route, the CPC pipeline, has returned to full loading capacity after maintenance, the pace of upstream recovery remains a key variable for the market.
Geopolitical tensions also supported prices. U.S. aircraft carrier strike groups have arrived in the Middle East, expanding Washington’s military posture as tensions with Iran remain elevated. President Donald Trump’s recent comments about an “armada” heading toward Iran, combined with a lack of progress on a Russia-Ukraine peace deal, have helped keep a floor under crude prices, analysts said.
Meanwhile, OPEC+ is widely expected to maintain its pause on oil output increases for March at its February 1 meeting, reinforcing expectations that producers remain cautious amid ongoing supply disruptions and geopolitical uncertainty.