New York, March 4, 2026, 13:56 EST — Regular session
Oil held mostly flat Wednesday, cooling after a choppy surge fueled by escalating U.S.-Israeli tensions with Iran and fresh headaches for shipping in the Strait of Hormuz. Brent edged down 24 cents to $81.13 a barrel as of 11:18 a.m. ET, off 0.3%, while U.S. West Texas Intermediate lost 27 cents, or 0.4%, sitting at $74.30. Reuters
Traders are building a war “risk premium” into prices, padding them against sudden supply shocks. But the mood shifts fast; diplomatic headlines can erase that cushion in minutes. The result: short-term bets stay shaky, with intraday swings stretching wide.
J.P. Morgan warned that if the strait stays closed, crude flows from Iraq and Kuwait might begin shutting down within days—potentially disrupting 3.3 million barrels per day (bpd) by the eighth day, with that number climbing if the closure drags on. The bank pointed out the waterway handles about 20% of all global oil and LNG traffic. Reuters
Earlier in the session, prices hovered near multi-month highs, but pulled back after the New York Times reported that Iranian intelligence operatives indicated possible willingness for talks with the U.S. Central Intelligence Agency, according to the report. UBS analyst Giovanni Staunovo noted that sentiment was shifting toward de-escalation and the potential return of flows, though he cautioned that extended disruption could still force more production shut-ins. Virginia Business
President Donald Trump has floated the idea of U.S. Navy escorts for tankers and hinted at measures like political risk insurance to back shipping in the Gulf. But for now, the insurance proposal appears far from finalized, with RBC’s Helima Croft calling it more “concepts-of-a-plan stage” than actionable, and raising doubts about whether tanker insurers have even been properly brought in. Business Standard
Energy markets faced fresh pressure out of Qatar, as the country plans to completely halt gas liquefaction operations on Wednesday. Two sources with knowledge of the situation said it will likely take at least a month before production and exports get back to normal levels. Qatar Energy has invoked force majeure—a legal provision for missed deliveries—and has not commented. Reuters
Russia is prepared to reroute crude shipments to India if Middle East supply gets disrupted, according to an industry source who spoke to Reuters. At least 9.5 million barrels are currently sitting on tankers close to Indian shores and could land in a matter of weeks. Russia, the source said, may boost its share of India’s crude imports to as much as 40%, up from roughly 30% now. Reuters
U.S. commercial crude inventories, not counting the Strategic Petroleum Reserve, increased by 3.5 million barrels to 439.3 million barrels for the week ended Feb. 27, according to government figures. Gasoline supplies dropped 1.7 million barrels. Distillate stockpiles, which cover diesel and heating oil, picked up 0.4 million barrels. Crude imports averaged 6.3 million barrels per day, a decline of 335,000 from the previous week.
Dennis Kissler, senior vice president of trading at BOK Financial, pointed to near-record amounts of crude sitting on tankers offshore, saying global supplies remain robust. Still, he cautioned that volatility isn’t likely to disappear until the flow of barrels becomes secure again. GV Wire
Banks are already updating their forecasts in response to the turmoil. Goldman Sachs bumped up its second-quarter Brent projection by $10, now calling for $76 a barrel. Its WTI outlook went up $9 to $71. The bank pointed to reduced Hormuz flows as a likely trigger for OECD inventory drawdowns. Brent, they said, could climb as high as $100 if current volumes persist for another five weeks. Still, Goldman flagged the potential for a quicker return to normal flows as a possible downside. Reuters
UBS has bumped up its Brent price outlook for both the first quarter and all of 2026, pointing to what it calls the effective shutdown of the strait and escalating conflict threats. The bank flagged that any attacks on key regional energy sites—Qatar LNG, for example—might send Brent prices past $90. A longer disruption could see crude breaking above $100. Reuters
OPEC reported that eight of its members settled on a 206,000 bpd production shift for April, resuming the gradual rollback of the 1.65 million bpd in voluntary cuts. Those eight are slated to regroup on April 5, aiming to assess both compliance and where the market stands. OPEC
Still, the downside risk lingers. Should the strait reopen ahead of expectations, or if credible ceasefire talks gain traction, the war premium could disappear quickly. Recent U.S. inventory builds underscore that supply isn’t tight across the board at the moment.
Priyanka Sachdeva, senior market analyst at Phillip Nova, flagged physical export flows out of the Gulf, verified tanker incidents, U.S. naval activity, and signals from Iran as the “key pointers.” On top of that, traders keep an eye on the weekly U.S. petroleum report—usually out just after 10:30 a.m. ET on Wednesdays—for clues on whether the disruption is starting to affect domestic inventories or refined product levels. Dawn
