Oil Rises as Supply Concerns Deepen on Iran War


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- Crude and refined product futures resumed their upward 
trend on Tuesday (3/17), extending the rally triggered by the escalating Middle 
East conflict on news that Israel killed two senior Iranian officials and 
Tehran retaliated with new attacks on regional oil infrastructure.

   At the close, WTI crude for April delivery settled up $2.71, or 2.9%, at 
$96.21 bbl, while the ICE Brent for May finished up $3.21, or 3.2%, at $103.42 
bbl.

   NYMEX ULSD futures for April delivery closed up $0.1783 at $4.0158 gallon. 
Front-month RBOB futures contract for April ended up $0.1231 at $3.1234 gallon,

   The US dollar index retreated by 0.213 points to 99.255 against a basket of 
currencies, supporting the rally across energy markets.

   The UAE said it is willing to join an international coalition proposed by 
U.S. President Donald Trump to protect oil tankers on the Strait of Hormuz 
blockaded by Iran.

   The UAE made its stance fter its main oil loading port Fujairah was 
repeatedly struck by Iranian drones. The decision also came after the reported 
deaths of Ali Larijani, secretary of Iran's Supreme National Security Council, 
and Gholamreza Soleimani, commander of an Iranian paramilitary volunteer from 
airstrikes carried out by Israel.

   European nations and NATO have expressed reluctance in joining the coalition 
proposed for Hormuz, with the EU's foreign policy chief Kaja Kallas stating: 
"This is not Europe's war."

   Trump expressed disappointment on Tuesday with that stance but said it will 
not impair the progress the U.S. was making in the war and at efforts in 
reopening the strait. "As soon as the war's over, oil prices will drop like a 
rock," the president told reporters at the White House.

   The Hormuz has remained impassable to maritime traffic at large since the 
February 27 start of the U.S.-Israel military campaign against Iran. Tehran has 
selectively allowed Iraqi- and Indian-flagged oil tankers on the waterway that 
during ordinary times provide passage to a fifth of the world's petroleum 
cargoes.

   Crude futures have risen some 40% in the 18 days of the conflict, which has 
isolated about 20 million bpd of petroleum liquids from the Hormuz and world 
market, according to DTN pricing data and market tracking by the International 
Energy Agency (IEA). Global middle distillate supply has particularly been 
strained by the sudden loss of 4 million bpd in Middle Eastern flows. The 
supply crunch is worsened by China's decision to ban all fuel exports through 
March to fulfill domestic requirements, regional oil analysts said.

   The decision by the EIA and the U.S to release more than 500 million bbl 
from emergency crude reserves has offset some of the supply strain.

   In domestic news, market attention is expected to be focused on the release 
of two sets of inventory data for the week ended March 13 -- with preliminary 
figures due at 4.30 p.m. today from the American Petroleum Institute, before 
the official numbers that arrive at 10.30 a.m. tomorrow (3/18) from the Energy 
Information Administration (EIA).

   In the prior week to March 6, the EIA reported that U.S. crude stocks 
climbed by 3.8 million bbl to 443.1 million bbl, reaching their highest for a 
week since May 2025.

   The Federal Reserve's Open Market Committee meeting began today, with its 
decision on U.S. interest rates due tomorrow potentially influencing markets, 
particularly if the central bank decides to cut rates. The Fed's last rate cut 
came in December, and current market expectations point to no change, keeping 
rates within the 3.5% and 3.75% range. 




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