SINGAPORE, March 23, 2026, 03:09 SGT
Oil is poised for another jump when Asian markets open Monday, after President Donald Trump warned Tehran he’d target Iran’s power plants if the Strait of Hormuz isn’t fully reopened within 48 hours. Iran fired back, vowing to hit Gulf energy and water infrastructure. Brent crude, the international gauge, ended Friday at $112.19 per barrel—the highest closing since July 2022. Reuters
Traders are starting the week pricing Hormuz like a true supply outage, not just a passing shipping hiccup. Iraq has slapped force majeure on oilfields operated by foreign firms—a move that lets them off the hook for obligations after uncontrollable events. Up front of CERAWeek, industry execs and analysts say refiners and petrochemical plants, mainly in Asia, have either throttled back processing, shut down units, or gone for force majeure themselves, with Gulf cargoes stuck in limbo. Reuters
The strait usually handles around 20% of global oil and LNG shipments. Since fighting broke out 22 days ago, that flow has been disrupted enough to wipe out four days’ worth of world oil supply. Brent crude climbed 8.8% last week, while West Texas Intermediate—America’s standard—trailed far behind, pushing its discount versus Brent to the widest margin in 11 years. Reuters
Analysts aren’t exactly reassured. Tony Sycamore at IG described Trump’s move as a “48-hour ticking time bomb of elevated uncertainty.” Over at Energy Aspects, founder Amrita Sen dismissed the view that Iran would just back down, cautioning instead about “scorched earth for Gulf infrastructure.” Reuters
The outlook’s turned grim, with traders giving up hope for a quick fix—even if a few tankers get moving again. UBS analyst Giovanni Staunovo sees crude prices tilted higher as long as Hormuz remains constricted. Over at Saxo Bank, Ole Hansen doubts a rapid turnaround is in the cards, citing the production hits already sustained. And IEA chief Fatih Birol, speaking to the Financial Times, warned the Gulf’s oil and gas flows might need up to six months to recover. Reuters
Washington’s moving barrels into the market where it can. On Friday, the Treasury rolled out General License U, letting Iranian-origin crude—already loaded as of March 20—make its way to buyers. The Department of Energy, for its part, awarded contracts for 45.2 million barrels from the Strategic Petroleum Reserve and began deliveries that very day. Treasury Secretary Scott Bessent put the potential impact of the Iranian waiver at about 140 million barrels. Still, Brett Erickson at Obsidian Risk Advisors doesn’t expect much effect until the strait is back open. OFAC
OPEC+ isn’t doing much to shield the market. On March 1, the group announced a 206,000 barrel-per-day increase starting in April, but as Reuters pointed out, that move barely registers compared to what would be lost if Hormuz were disrupted. OPEC
Next up: Houston, with CERAWeek kicking off Monday. Saudi Aramco, Chevron, Shell execs, and OPEC+ ministers all slated to appear. “Security and affordability” will be the main themes, according to Dan Yergin. Pickering Energy Partners’ Dan Pickering calls U.S. shale “status quo” for now, waiting for clarity on the war’s duration. Since crude prices took off, the S&P 500 energy sector pushed higher—even as the broader index touched a six-month low. Reuters
Beyond the supply noise, traders this week turn to flash business activity surveys, Japan inflation figures, and the OECD’s interim outlook, scanning for the first signs that the oil shock is pushing up factory costs, service-sector prices, and growth forecasts. Investors reckon Asia and Europe face greater risk than the United States from renewed imported energy inflation. Reuters
This isn’t a one-way trade. Iran’s representative at the International Maritime Organisation maintained the strait is still open to vessels unconnected to Iran’s adversaries, saying safe transit can be arranged with Tehran. Should that route widen and emergency supplies reach refiners sooner than expected, Brent might give up some of last week’s gains. But right now, threats—not relief—are driving the week’s tone. Reuters
