US-Iran war: Oil prices advanced on Monday, March 16, as investors refocused on potential risks to Middle East energy infrastructure, even after US President Donald Trump urged nations to help protect the Strait of Hormuz, a key passage for global oil shipments.
Brent crude futures rose $1.27, or 1.2%, to $104.41 a barrel, following a gain of $2.68 in the previous session. Meanwhile, West Texas Intermediate crude climbed 54 cents, or 0.6%, to $99.25 a barrel after rising nearly $3 on Friday.
Both contracts have jumped more than 40% this month, reaching their highest levels since 2022, after US-Israeli strikes on Iran led Tehran to suspend shipping through the Strait of Hormuz, disrupting nearly a fifth of global oil supply in what is being described as the largest supply shock on record.
Back home, crude oil prices on Multi Commodity Exchange (MCX) also rallied, tracking global prices. MCX crude oil prices were trading 1.90% up at ₹9,227 per barrel.
What’s driving crude oil prices today?
Over the weekend, Trump warned of additional strikes on Kharg Island — which handles roughly 90% of Iran’s oil exports — after earlier attacks on military targets there prompted a defiant response from Tehran, including threats of further retaliation.
Soon after the Kharg attacks, Iranian drones struck a major oil terminal in Fujairah in the United Arab Emirates. According to a Reuters report, oil loading operations at Fujairah have since resumed, though it remains unclear whether activities have fully returned to normal.
Located outside the Strait of Hormuz, Fujairah serves as a key export outlet for about 1 million barrels per day of the UAE’s flagship Murban crude oil — roughly equivalent to 1% of global oil demand.
On Sunday, Trump said he was urging other countries to contribute to safeguarding the crucial energy shipping route, adding that the United States was holding discussions with several nations on coordinating efforts to secure it.
Trump also noted that Washington remains in contact with Iran, though he voiced skepticism about Tehran’s willingness to engage in meaningful negotiations to bring the conflict to an end.
Meanwhile, the International Energy Agency said on Sunday that more than 400 million barrels of oil reserves would soon be released into the market — a record drawdown intended to ease price spikes triggered by the Middle East conflict.
Crude oil prices outlook
Ponmudi R, CEO of Enrich Money, believes that WTI crude oil is currently stabilising near the $98–$100 zone, after retreating from the extreme volatility seen earlier in the week when prices briefly surged toward $110–$119.
“Initial corrections were driven by expectations of a coordinated Strategic Petroleum Reserve (SPR) release, but renewed geopolitical tensions and supply concerns continue to keep prices elevated. A break below $96 could trigger a deeper retracement toward $94, potentially filling the conflict-driven gap. On the upside, a sustained move above $100 could revive bullish momentum toward $105–$110,” Ponmudi said.
Meanwhile, Choice Institutional Equities said in a note that Brent crude is likely to reach $130 per barrel by the end of this week.
“The market may enter the scarcity-premium phase as floating inventories diminish and marginal storage tightens. In such a scenario, price moves tend to accelerate sharply, which could push Brent towards ~USD 130/b by the end of this week,” the brokerage firm said.
(With inputs from Reuters)
Disclaimer: This story is for educational purposes only. Please consult with an investment advisor before making any investment decisions.
