Oil Markets

Oil Trades Close to $100 After Attacks in Gulf — Ships and Energy Infrastructure

Published

8 months ago

March 12, 2026

The Persian Gulf woke before dawn to the glow of burning tankers.

By the time London’s oil traders logged their terminals on Thursday morning, Brent crude futures had surged 6.2% to $97.66 a barrel at around midday London time, after earlier breaching the $100 threshold CNBC — a psychologically devastating milestone that analysts had warned of since the first U.S. and Israeli bombs fell on Iranian territory thirteen days ago. Brent is now up approximately 38% over what it cost when the war started on February 28. Spectrum News 1 For the global economy, still nursing the wounds of post-pandemic inflation, the arithmetic is brutal.

This is no longer a regional skirmish. It is a systemic energy shock of a kind not witnessed since the Arab oil embargo of 1973 — and, on several metrics, already surpassing it.

The Anatomy of Thursday’s Attacks: From Basra to Dubai Creek

Three ships were hit by unknown projectiles in the Persian Gulf early Thursday, according to the United Kingdom Maritime Trade Operations Center. One container ship was struck off the coast of Jebel Ali, United Arab Emirates, causing a small fire onboard. Two tankers were also hit near Al Basrah, Iraq, and were set ablaze — though all crew members were reported safe. UPI

Iran’s Islamic Revolutionary Guard Corps claimed one of those strikes with characteristic theatricality. IRGC footage showed the moment the Safesea Vishnu, a Marshall Islands-flagged vessel, was struck. In the footage, a man can be heard shouting declarations of victory in Khamenei’s name. U.S. News & World Report The vessel’s operators and cargo have not been publicly confirmed, but maritime intelligence sources say it was carrying refined products bound for South Asia.

The strikes on Iraqi waters represent a significant escalation. The two tankers hit near Basra’s southern port area marked the first oil-related strike reported in Iraqi waters since the war began. KPBS Iran, which maintains deep influence over Baghdad, appeared willing to inflict economic pain on a nominal ally — a signal of how far Tehran is prepared to go.

Iran also caused a blaze near Bahrain’s international airport on Muharraq Island, targeted a major Saudi oil field with a drone, and forced Iraq to halt operations at all of its oil terminals. In Kuwait, a drone struck a residential building, wounding two people. In Dubai, firefighters extinguished a blaze at a tower in Dubai Creek Harbour after a drone hit. Washington Times

Iran flouted a U.N. Security Council resolution from the previous day demanding that it halt strikes on its Gulf neighbours. Spectrum News 1 Tehran’s message, delivered not in diplomatic cables but in drone wreckage, was unmistakable: no external legal architecture will constrain its campaign.

The Hormuz Chokepoint: 20 Million Barrels a Day on the Knife’s Edge

The Strait of Hormuz — a 33-kilometre-wide channel between the Iranian coast and the tip of Oman — is the jugular vein of the global oil economy. About 20% of global oil consumption passes through the strait. NPR That is roughly 20 million barrels per day, supplying refineries from Rotterdam to Riyadh to Yokohama.

Iran has not needed a formal naval blockade to achieve an effective halt. By deploying selective drone and rocket attacks, Tehran has been enough to make shipping companies and the insurers who underwrite them balk at the risk of sending ships through the strait, resulting in what amounts to a total halt of tanker traffic. NPR

Strategists noted oil prices were trading higher precisely because there appears to be no end in sight to supply disruptions through the Strait of Hormuz. Dutch bank ING stated in a research note: “The only way to see oil prices trade lower on a sustained basis is by getting oil flowing through the Strait of Hormuz. Failing to do so means that the market highs are still ahead of us.” CNBC

Prices have already demonstrated what “ahead of us” can look like. Brent crude spiked to nearly $120 a barrel on Sunday before retreating NBC News — a foretaste of what a prolonged closure portends.

Brent Crude Price	Date / Context
~$72/barrel	February 27, 2026 (pre-war)
~$80/barrel	March 1–2 (war day 1–2, Hormuz halts)
~$120/barrel	March 8 (Sunday spike, infrastructure fears)
$97–100/barrel	March 12 (current, post-IEA release)
$120–150/barrel	Analysts’ worst-case if closure persists 60+ days

The IEA’s Historic Intervention — and Why Markets Are Unconvinced

In an attempt to calm markets, the International Energy Agency announced that its member countries will release a combined 400 million barrels of oil from emergency reserves — the largest coordinated stock drawdown in the organization’s history. IEA Executive Director Fatih Birol called the oil market challenges “unprecedented in scale.” UPI

The U.S. confirmed it will release 172 million barrels from the Strategic Petroleum Reserve, roughly 40% of the total, to be released gradually over about four months. KPBS

And yet: oil remains above $95 a barrel. The market’s verdict on the IEA intervention is, politely, sceptical.

The reasons are structural. Strategic stockpiles are held separately by each IEA member country, meaning technical and logistical constraints could slow the flow of barrels. As one analyst noted: “Four hundred million is a big number… but this is the largest oil supply disruption since at least the 1970s, so we need a lot of oil, and we need it quickly.” CNBC

The intervention also carries an inadvertent signal. The very scale of the release — unprecedented in the IEA’s 52-year history — telegraphs the severity of the threat. Releasing 400 million barrels does not inspire calm when markets understand it implies a supply hole that may be measured in billions.

Iran’s Strategic Logic — and the Pressure Calculus

Understanding Tehran’s campaign requires understanding its objective. Iran is attempting to inflict enough global economic pain to pressure the United States and Israel to halt their bombardment, which started the war on February 28. Iran’s president has said its attacks would continue until Iran receives security guarantees against another assault — indicating that even a ceasefire or U.S. declaration of victory might not halt the conflict. Spectrum News 1

Iran’s parliamentary speaker, Mohammad Bagher Qalibaf, threatened that any attempt to take Iranian islands would “make the Persian Gulf run with the blood of invaders,” adding that “the blood of American soldiers is Trump’s personal responsibility.” Spectrum News 1

President Trump, for his part, has sent contradictory signals. He told supporters “we won” but also vowed to “finish the job,” claiming Iran is “virtually destroyed.” NBC News Markets, which require clarity above all, have responded to this ambiguity with volatility.

Iran has been able to load an estimated 18.5 million barrels of oil for shipment since the start of the war, the vast majority from Kharg Island in the Persian Gulf and bound for China U.S. News & World Report — indicating Tehran retains some export capacity even as it attacks its neighbours’ shipping. The asymmetry is deliberate: Iran exports through the Gulf while making the Gulf uninhabitable for everyone else.

Ripple Effects: Insurance, Inflation, and the Hidden Costs

The price of crude is only the most visible wound. The secondary and tertiary effects are spreading through the global economy with the relentless logic of a supply shock.

War-Risk Insurance Premiums have become prohibitive for voyages anywhere near the Arabian Sea. Lloyd’s of London market sources indicate war-risk surcharges have risen by a factor of ten since February 28 for Gulf-adjacent routes. Ships rerouting around the Cape of Good Hope add 10 to 14 days and roughly $1–2 million in additional fuel and operating costs per voyage.

Aviation Fuel Surcharges are already being quietly implemented by Gulf carriers and Asian airlines with heavy Middle East exposure. Jet fuel, which tracks closely to crude oil, has surged in sympathy. Carriers operating long-haul routes through Dubai, Abu Dhabi, and Doha face acute cost pressures.

Fertiliser and Food Prices face an underappreciated risk. The Gulf region is a critical source of sulphur, a by-product of petroleum refining used to produce sulphuric acid and ultimately fertiliser. Disruptions to Gulf refinery output will tighten sulphur markets within weeks, creating a secondary shock to agricultural input costs that will appear in food prices two to three seasons later.

Emerging Market Vulnerability is acute. India and Pakistan — both heavily dependent on Gulf crude — face twin shocks: higher import bills in depreciating currencies and rising food inflation. South Asian central banks that have spent years rebuilding post-pandemic credibility now face a demand for rate increases at precisely the moment their economies are most fragile.

Meanwhile, banks across the region have stepped up precautions after Iran threatened Gulf banking interests linked to the U.S. and Israel. HSBC closed all branches in Qatar until further notice, and Citibank told staff to evacuate offices in the Dubai International Financial Centre. NBC News The financial system, not just the energy system, is beginning to price in sustained conflict.

Three Scenarios: Where Oil Goes From Here

Base Case ($95–110/barrel, 4–8 weeks): Conflict continues at current intensity. The IEA reserve release provides partial relief. Strait of Hormuz remains de facto closed but Iran does not formally announce a blockade. OPEC’s spare capacity — concentrated in Saudi Arabia and the UAE, both now directly under Iranian drone attack — is partially mobilised but logistics constrain delivery. Brent oscillates between $95 and $110. Global GDP growth loses 0.5–0.8 percentage points. Recession risk remains elevated but contained.

Best Case ($75–85/barrel, 6–10 weeks): A U.S.-brokered ceasefire, possibly via Qatari intermediaries, produces a temporary halt. Iran receives informal security assurances. Hormuz reopens to commercial traffic under a naval escort regime. Reserve releases bridge the supply gap. Markets price relief rapidly and overshoot to the downside before stabilising.

Worst Case ($130–160/barrel, 3–6 months): U.S. strikes on Kharg Island — currently the subject of intense speculation — destroy Iran’s primary export terminal. Tehran responds with a formal naval blockade and mine-laying operation in Hormuz. Saudi Aramco’s Shaybah field suffers serious damage. The global economy enters recession. Central banks face their worst nightmare: a stagflationary spiral demanding simultaneously higher rates to fight inflation and lower rates to combat recession.

ING’s strategists have noted that market highs are “still ahead” if the strait remains blocked CNBC — a warning that the $100 threshold breached Thursday may, in retrospect, look like a modest data point on a chart still heading north.

The Geopolitical Dimension: China, India, and Europe’s Scramble

Iranian oil shipments bound for China continued even as Tehran attacked Gulf shipping U.S. News & World Report, creating an extraordinary diplomatic tension. Beijing has deep financial exposure to Iranian crude under long-standing shadow-fleet arrangements, and a genuine interest in seeing the conflict end — but not at the price of publicly endorsing American military objectives.

For Europe, the calculus is different and more immediately painful. The continent spent three years weaning itself off Russian gas after Ukraine; it cannot afford a parallel crisis in its oil supply chains. German industry, already battered by high energy costs, faces a new existential test.

The Kremlin has said discussions are taking place between Moscow and Washington about ways of cooperating to stabilise energy markets reeling from the effective closure of the Strait of Hormuz NBC News — a geopolitical development of stunning irony, given that Russia and the United States remain adversaries across multiple other theatres.

The Bottom Line

Thirteen days into the most consequential Middle East conflict since the 2003 invasion of Iraq, the global energy system is operating without its most critical artery. Brent crude prices spiked to nearly $120 a barrel on Sunday before retreating UPI, and the forces that drove them there — Iranian drone capacity, Hormuz paralysis, infrastructure vulnerability, and political intransigence on all sides — have not diminished.

The IEA’s 400-million-barrel intervention is historic in scale and admirable in coordination. It is also, as markets are making plain, insufficient in isolation. Reserve releases buy time. They do not move tankers. They do not clear minefields. They do not negotiate peace.

Until a diplomatic architecture emerges that can credibly reopen twenty miles of international waterway, every metric of global economic health — inflation, growth, trade, food security — will be held hostage to the glow of burning ships on the Persian Gulf at dawn.

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Markets & Finance

Oil at $100+: Hormuz, a Qatari Peace Draft and the Iran Deadline

Published

5 days ago

October 30, 2026

Abdul Rahman

Brent futures reached about $115 a barrel on Tuesday, a six-month high, according to CNBC, after touching roughly $117 the day before. WTI traded just above $101, per FXStreet. The move extended gains from last week, when Iranian attacks on tankers pushed prices to their highest since April.

Two Forces Pulling Opposite Ways

Diplomacy. Iran is weighing a Qatari draft proposal to end the war, and a reply is expected by the end of the week. The Wall Street Journal reports that Washington has also asked Gulf states to prepare for a possible renewed US campaign after the 3 November midterm elections, which complicates the picture. Separately, the Journal reports that Vice President JD Vance wrote to Iran’s Mohsen Rezaei in an attempt to reopen talks; this was not independently confirmed. Oil eased in Asian trading on Thursday on those outreach reports, according to Investing Live.

Supply risk. CNBC reports that Houthi attacks on Saudi infrastructure keep supply worries alive even as diplomatic hopes lift sentiment. The Strait of Hormuz carried about a fifth of the world’s energy supplies before the conflict began in February, which is why any disruption feeds quickly into prices. Kitco’s market report this week described Hormuz uncertainty as the reason oil stayed elevated ahead of the Fed meeting.

The Inventory Signal

US data adds a mixed picture. EIA figures show crude inventories fell by about 1.9 million barrels last week while gasoline stocks rose by about 3.9 million barrels, per FXStreet. Falling crude stocks support prices; rising gasoline stocks suggest weaker US demand for the refined product.

The Medium-Term Supply Gap

The World Bank expects global oil supply to fall about 5.2% in 2026, according to FXStreet’s summary. That is a structural, not just sentiment-driven, shortfall, and it explains why diplomatic headlines move prices by a few dollars while the level stays high.

Scenarios for the Next Two Weeks

Deal progress: if Iran accepts the Qatari draft, expect a risk premium unwind; prices could fall sharply but not back to pre-war levels given the supply loss already incurred.
Stalemate: prices stay in a high, headline-driven range.
Escalation after the midterms: renewed US action or further attacks on Gulf infrastructure would test the recent highs.

These are scenarios, not forecasts; the single largest driver is Iran’s reply.

Who Feels It

Central banks: the Fed held rates on 28 October with two members preferring a hike, and Pakistan’s central bank cited oil near $100 when it raised its rate to 12%.
Importers: energy-importing economies see pressure on inflation and external balances.
Airlines and travel: fuel is the largest swing cost for carriers; see our airfare outlook.
Gold: precious metals have traded as a hedge against the same uncertainty.

Bottom Line

Oil above $100 is the product of a war premium and a real supply loss. A Qatari-brokered deal could take some heat out of prices, but the market is pricing a good deal of caution until Iran actually answers.

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Markets & Finance

Russia Sanctions Waiver: What Asian Oil Buyers Gain

Published

1 week ago

October 25, 2026

Abdul Rahman

An unexpected shift in US sanctions policy has given Asian energy buyers a potentially important reprieve. It has also opened fresh questions about how importers should balance cheap fuel, diplomatic relationships and the risk that trading rules may change again.

On October 17, Reuters reported that President Donald Trump had issued an order waiving important Russia-related sanctions and tariffs before planned measures took effect. A subsequent Reuters account identified India as a significant beneficiary, given its role as a major Russian oil customer. The move reduces one category of immediate concern; it does not guarantee unlimited imports free of every restriction.

Why buyers in Asia care

Asia’s refineries compete for crude on price, quality, transport economics and availability. A sanction or tariff threat adds uncertainty to contracts even before it is implemented. Trading banks, insurers and shipowners may become more cautious; buyers may diversify supply or ask for discounts to compensate for risks.

A waiver can therefore matter before a single new tanker sails. It may improve the feasibility of existing contracts and ease pressure for rapid, expensive substitution. Still, the benefit depends on the precise terms of the waiver, the identity of the buyer and seller, the bank handling payment and the practical shipping route.

India is the immediate test case

India’s refining industry has cultivated access to discounted Russian crude, but its policymakers also value the trading relationship with Washington. The reported waiver potentially reduces friction between energy security and trade negotiations. Reuters’ October 19 analysis connected the decision to hopes for progress on a broader US–India trade deal.

Yet it would be a mistake to treat the waiver as permanent diplomatic alignment. Policy decisions may be reviewed, challenged or narrowed. India’s future purchases will still depend on relative crude prices and refinery requirements, not diplomatic headlines alone.

Why oil did not simply collapse

Market reports described some easing after the policy decision, but Middle East disruption and threats to physical energy infrastructure remained important. A Reuters oil-market report cautioned that implementation uncertainty limited confidence in sustained additional supply.

More Russian barrels accessible on paper may fail to solve problems caused by damaged refining equipment, disrupted shipping lanes or unusually tight diesel stocks elsewhere. Crude oil is also not a homogeneous product. Refineries are configured for specific blends; changing the input can increase costs or reduce efficiency.

Winners and losers are not obvious

Stakeholder	Potential benefit	Important caveat
Indian refiners	Access to competitive crude	Compliance and financing
Other Asian importers	Some relief from global supply pressure	Eligibility differs by transaction
Tanker operators	More potential freight business	Insurance and security costs
Oil exporters competing with Russia	Demand can shift away	Overall prices and volumes still uncertain
Asian consumers	Possible easing in fuels	Taxes, FX and local distribution affect pump prices

Smaller importers should not assume a waiver affecting one set of transactions automatically provides legal cover for every Russian energy purchase. Compliance teams must examine operative legal documents, not rely on a news summary as advice.

The geopolitical trade-off

Critics argue that relaxing pressure on Russia can weaken coercive leverage relating to the war in Ukraine. Supporters of relief emphasise the cost of energy scarcity and the need to stabilise prices. These perspectives reflect a genuine policy trade-off: reducing immediate energy stress may conflict with broader sanctions objectives.

A rigorous regional article should distinguish the economic effects of the waiver from an endorsement of its foreign-policy rationale. It should also avoid forecasting specific oil-price declines from a change whose practical effects are still being assessed.

What to watch in November

Importers and analysts should monitor official US rules, commercial purchase announcements, actual tanker arrivals, refinery throughput and the spread between competing crude grades. Other developments—including renewed conflict around Hormuz—could easily overwhelm the marginal supply effect of the waiver.

The paperwork behind a cheap barrel

A tanker purchase is not simply a quoted price multiplied by volume. The buyer must consider contract origin, payment route, shipping ownership, insurance, discharge location, refinery compatibility and applicable legal restrictions. Even when particular sanctions measures are waived, businesses should confirm whether related banking or export controls remain relevant to the proposed transaction.

The economic gain from a discounted crude grade also depends on refining yields. A barrel that produces a lower share of the products a refinery needs may be less valuable than a seemingly more expensive alternative. Freight routes, demurrage and quality specifications can erase an advertised discount. That is why refinery-level economics matter more than a headline claim that Russian oil is ‘cheap’.

Asian policymakers also need to distinguish short-term energy security from strategic dependence. Diversification across suppliers, fuels and transport routes generally provides resilience when a major trading partner or shipping corridor is disrupted. An importer that shifts too much procurement to one politically sensitive source may exchange today’s cheaper invoices for tomorrow’s concentrated risk.

A practical follow-up story should compare actual arrival data and refinery purchases after the waiver. Only then can readers distinguish a change in legal permission from a change in physical supply.

Are all Russian sanctions now removed?

No. Reporting describes waivers of specified measures. The exact surviving restrictions and compliance obligations must be checked against current official documents.

Will Indian petrol immediately become cheaper?

Not necessarily. Crude prices, refining margins, taxes and distribution costs intervene.

Does the waiver solve Asia’s energy security problem?

No. It can ease one bottleneck while leaving transport, geopolitical and market vulnerabilities intact.

For Asian buyers, the opportunity is flexibility—not certainty. The sensible response is to diversify procurement and understand the legal terms before betting a fuel strategy on a political announcement.

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Markets & Finance

Asia Markets Weekly: How Oil, US Yields and the Fed Reach Tokyo, Kuala Lumpur and Karachi

Published

1 week ago

October 25, 2026

Abdul Rahman

The global market’s biggest stories can look deceptively American: a Federal Reserve decision, a Treasury yield and a Wall Street earnings call. Yet the cost of these events is often felt most sharply across Asia, where energy import dependence, divergent monetary policies and unequal access to technology investment create different winners and losers.

The next scheduled Federal Reserve policy decision is October 28, according to its official calendar. The US 10-year Treasury yield was around 5.00% by October 23, down from higher levels earlier in the month. Oil was still elevated, while the IMF’s latest global outlook sees world growth slowing to 3.1% in 2026. These common shocks will not produce uniform Asian market returns.

Tokyo: currency moves complicate the equity story

Japan’s multinational exporters can be sensitive to yen movements because overseas revenue must be translated back into local currency, while domestic consumers and importers face different pressures when the yen weakens. The effect is not one-directional: a weaker currency may support export competitiveness but raise fuel and food import costs.

Investors should distinguish a broad index rally driven by a few large manufacturers or technology names from improving profits across the economy. Japanese government-bond yields and domestic monetary policy also matter. A US rate move may change yen-dollar incentives, but it does not dictate Japanese policy.

Kuala Lumpur: energy exposure is mixed

Malaysia’s place in the global energy system is different from that of a pure importer. Some businesses benefit from upstream prices, while manufacturers, transport operators and households can face higher costs. Currency and fiscal effects depend on domestic subsidy design, trade receipts and the balance between oil and gas revenues and imported refined products.

For equity investors, oil up should not be treated as a universal buy signal. Airlines, logistics companies, industrial users and energy-related firms can have opposing sensitivities. Malaysia’s electrical and electronics export exposure also links the country to the AI hardware cycle, but final demand and margins deserve scrutiny.

Karachi: the import bill dominates

Pakistan’s external vulnerability is sharper because energy prices can quickly affect dollar demand, local prices and business borrowing costs. The World Bank reported on October 22 that reforms and macro stabilisation had supported growth, but conflict-related pressures remained. Higher energy costs can erode these improvements even when the US equity market rises on technology earnings.

For the Pakistan Stock Exchange, sector analysis matters more than a generic Asian risk-on or risk-off label. Banks, energy firms, exporters, consumer businesses and highly leveraged industrial companies have distinct exposures to rates and exchange rates.

The regional transmission map

Shock	Japan	Malaysia	Pakistan
US yields rise	Yen and valuation sensitivity	Funding costs, foreign flows	Dollar pressure and external borrowing context
Brent crude rises	Import cost pressure	Mixed effects across producers and users	Import bill, petrol and inflation pressure
AI investment accelerates	Capital goods and semiconductor ecosystem	Electronics supply chain opportunities	Selective digital services potential, energy constraints
Global demand softens	Exporters affected	Trade and tourism affected	Export and remittance channels

These are transmission mechanisms, not guaranteed daily market movements. Political measures, domestic policies and company-specific developments can overwhelm them.

What to watch next week

The Fed’s statement and press conference will indicate how officials weigh inflation against growth. US technology earnings will test whether expensive AI infrastructure is translating into profitable demand. Oil-market shipping and security developments remain a separate source of risk that can upset even the strongest company results.

Investors should also check Asian market holidays, local economic releases and currency fixing times. Comparisons made across different trading-session cutoffs can create false narratives about which exchange responded first.

A sharper method than daily prediction

A regional investor can create a four-factor watchlist: oil, US yields, the dollar and domestic policy. For each market, identify companies with pricing power, foreign-currency debt, export income and energy-cost exposure. That framework is more durable than confident predictions about Monday’s opening index point.

How to read a cross-market comparison properly

A strong weekly comparison should fix each market’s closing date and reporting currency. If one exchange is closed for a holiday while another has traded through a major US event, their percentage changes cover different information sets. A reader can misinterpret this as one market being more resilient when the difference is mostly timing.

Currency conversion adds another complication. A stock index may gain in local currency but deliver a smaller return to an investor measuring wealth in dollars. This does not mean one series is incorrect; it means the investor’s benchmark is different. Analysts should label both local and dollar-adjusted comparisons and resist mixing them within a single ranking.

The regional supply-chain connection deserves the same precision. AI demand can benefit semiconductor and electrical-equipment producers, but the benefit is not evenly distributed across Tokyo and Kuala Lumpur, and it may have little immediate impact on a Pakistani small business facing higher power bills. A regional theme should identify channels rather than assume countries move together.

At the end of each weekly roundup, list the coming policy announcements and company results with local times. A reliable calendar may be more valuable to investors than an index-level prediction.

Will a Fed hike automatically trigger an Asian sell-off?

No. Expectations, positioning and the Fed’s message matter, alongside domestic fundamentals.

Which Asian markets benefit when oil rises?

The answer depends on the mix of producers, refiners, importers, subsidy arrangements and market valuations.

What is the most useful common comparison?

Compare earnings and cash-flow sensitivity to oil, currency and rates rather than comparing headline index changes alone.

The regional lesson: Asia is not one trade. From Tokyo to Kuala Lumpur to Karachi, the same global shock is filtered through a different currency, industrial structure and policy response.