UAE Habshan Gas Plant Shut Down for Second Time in Two We...

Oil markets closed the Friday session on April 4 with prices holding near multi-year highs as a second shutdown of the UAE's largest gas processing facility deepened supply anxieties, India disclosed a dramatic pivot toward Russian crude, and J.P. Morgan analysts issued a stark warning that Brent could climb above $150 per barrel if the Strait of Hormuz blockade persists through mid-May.

Habshan Goes Dark Again as Iran Drone Debris Sparks Second Shutdown

Abu Dhabi National Oil Company suspended operations at the Habshan gas processing complex for the second time since the conflict began after debris from an intercepted Iranian drone strike ignited a fire on April 3, killing at least one worker and injuring four others. The sprawling facility handles roughly 1.5 billion cubic feet of gas per day from Abu Dhabi's onshore fields and serves as the origin point for the Habshan-Fujairah crude pipeline, which carries oil to the port of Fujairah outside the Strait of Hormuz.

The strategic significance of the pipeline cannot be overstated. The 380-kilometre Habshan-Fujairah route was explicitly designed as a bypass for Hormuz, allowing Abu Dhabi to export crude even when the strait is closed. Satellite imagery released Thursday showed fires at two pumping stations along the pipeline corridor, raising the possibility that the bypass route itself may face operational constraints. If both the strait and the pipeline are compromised simultaneously, Abu Dhabi's export options narrow dramatically, removing one of the market's key psychological backstops.

This marks the second interruption at Habshan since regional hostilities escalated, a pattern that suggests the facility's redundant infrastructure and air-defence coverage are insufficient against sustained low-cost drone campaigns. Gas supply to Abu Dhabi's downstream industrial zone at Ruwais, including the world's largest single-train refinery complex, may also be affected during the outage.

India's March Oil Imports: 47% Russian, Virtually Nothing from the Gulf

Data released Thursday confirmed a historic realignment of Indian crude procurement. Russia's share of Indian oil imports surged to 46.8% in March 2026, up from 20.4% in February, as a 30-day U.S. sanctions waiver facilitated Indian purchases of Russian crude at a moment when Middle Eastern supply routes remained impassable. Total Russian volumes jumped to 1.96 million barrels per day, a 90% month-on-month increase from 1.04 million bpd in February.

The shift is significant beyond the headline numbers. Before the Hormuz disruption, Indian refiners had been gradually diversifying away from Russia in anticipation of tightening sanctions enforcement. The crisis reversed that trend at scale: Qatari LNG deliveries to India collapsed 92% in March as the conflict cut pipeline and LNG shipping through the Gulf, and Saudi volumes fell sharply. Indian total crude imports declined nearly 15% year-on-year despite the Russia surge, meaning Indian refineries are running below capacity even as they scramble for alternative supply.

The India data also highlights a structural problem for Russian crude pricing. Moscow is now shipping volumes to Asia without the discount that once made Urals attractive to Indian buyers. Russian crude's share of India's imports is at a nine-month high, but the price concession has largely evaporated, as Asian buyers have no affordable alternatives. For Canadian heavy producers, the India shift reinforces existing demand for Western Hemisphere grades that can substitute for the light sweet volumes that no longer move through Hormuz. Alberta synthetic crude was trading at a US$19.25 per barrel premium over WTI earlier this week, driven by precisely this dynamic.

J.P. Morgan Sets $150 Marker; OPEC+ Faces Existential Choice April 5

J.P. Morgan's global economics team warned this week that a continuation of the Hormuz blockade through mid-May would be consistent with Brent crude climbing toward $150 per barrel. The bank's base case remains a negotiated resolution that leaves oil above $100 through the second quarter, but stressed that the risk distribution is asymmetric, with upside surprises more likely than demand destruction pulling prices lower in the near term.

Brent crude settled near $108 per barrel on Friday while WTI continued to trade at a premium over Brent, settling around $111, an unusual market structure that reflects the scramble among European and Asian buyers for deliverable crude that does not transit the Strait. Western Canadian Select crude traded near $99 per barrel in USD terms, approximately $12 below WTI, as Canadian heavy oil finds a more receptive market than at any point since the Trans Mountain Expansion came online. Henry Hub natural gas was near $3.05 per million British thermal units.

The OPEC+ Joint Ministerial Monitoring Committee meets Saturday, April 5. As covered in Thursday's wrap, the group had agreed in March to a 206,000 barrel-per-day output increase for April, a decision that now appears largely symbolic given that OPEC+ Gulf producers cannot physically export from facilities affected by the conflict. Delegates have indicated the group may announce an increase on paper while acknowledging it will have no near-term supply impact, preserving the alliance's theoretical output trajectory without committing to volumes it cannot deliver.

First European Vessel Transits Hormuz in Weeks

In a cautiously watched development, a CMA CGM container vessel became the first Western European-flagged ship to transit the Strait of Hormuz since the blockade effectively began in late February. The passage was completed without incident under naval escort but has not yet triggered a broader resumption of commercial traffic. Shipping analysts noted that individual transits under military protection are unlikely to represent a sustained reopening, and that most carriers are maintaining diversions via Cape of Good Hope pending a clearer security guarantee from U.S. and allied naval forces operating in the region.