Escalating U.S.–Iran Conflict Lifts the Oil Market Toward $100

Recap: The oil market on Friday ended the session higher ahead of the weekend amid reports that the U.S. would intensify strikes against Iran, while Israel conducted multiple strikes across Iran’s capital, Tehran. The market had been under pressure after the U.S. announced measures to stabilize global energy markets affected by the U.S.-Israeli war on Iran. The market traded $98.09 on the opening before it began to erase any of its gains on news that the U.S. issued a 30-day license for countries to buy Russian oil and petroleum products stranded at sea. The market also eased off its highs amid reports that an India-flagged tanker sailed out of the Strait of Hormuz, which has been largely shut to tanker traffic amid fears of transiting the waterway following Iranian threats. The crude market posted a low of $92.04 by mid-morning before it started on an upward trend. The market rallied to a high of $99.32 ahead of the close on reports that indicated that the U.S. was moving a Marine expeditionary unit to the Middle East, which may signal an escalation in the war against Iran. The April WTI contract settled up $2.98 at $98.71 and the May Brent contract settled up $2.68 at $103.41. The product markets ended the session higher, with the heating oil market settling up 11.58 cents at $4.0147 and the RB market settling up 7.68 cents at $3.0414.

Technical Analysis: The oil market will be driven by the latest headline regarding the U.S.-Israeli war against Iran seen over the weekend. It will remain supported by the continuing risks that further production will have to shut in due to the closure of the Strait of Hormuz. The market will closely watch for developments following the U.S. attack on Iranian military targets on Iran’s Kharg Island on Friday, with President Trump threatening to strike oil infrastructure on the island if Iran continues to block shipping through the Strait of Hormuz. The island serves as the export terminal for 90% of Iran’s oil shipments. The market is seen finding resistance at $99.32, $103.15, $104.85, $107.41, $116.75, $119.48 and $130.50. Meanwhile, support is seen at $92.04, $88.61, $81.79 and $76.73, followed by $74.97, $73.28, $70.41 and $69.20 to $67.83.

Fundamental News: Baker Hughes reported that U.S. energy firms this week added oil and natural gas rigs for a second consecutive week for the first time since early February. The oil and gas rig count increased by two to 553 in the week ending March 13^th, its highest level since November 2025. Baker Hughes said oil rigs increased by one to 412 this week, their highest level since early February, while gas rigs increased by one to 133, their highest level since late February.

Saudi Arabia has cut oil production by about 2 million bpd to around 8 million bpd after reducing output from two major offshore fields amid the Iran war. While Saudi Arabia is routing more oil to Yanbu on the Red Sea coast to avoid the Strait of Hormuz, production is down to around 8 million bpd after the Safaniya and Zuluf offshore fields were shut. Another source said Saudi production was down to below 8 million bpd. A cut in Saudi production to 8 million bpd is a sizeable drop from February, when Saudi Arabia supplied 10.111 million bpd to the market and produced 10.882 million bpd. The February production increase was a contingency plan in case any U.S. strike on Iran disrupted Middle East supplies. On Thursday, the IEA said Middle East Gulf countries including Iraq, Qatar, Kuwait, the United Arab Emirates and Saudi Arabia have cut total oil production by at least 10 million bpd, adding that without a rapid restart of shipping flows these losses were set to increase.

IIR Energy said U.S. oil refiners are expected to shut in about 970,000 bpd of capacity in the week ending March 13^th, increasing available refining capacity by 250,000 bpd. Offline capacity is expected to fall to 900,000 bpd in the week ending March 20^th.

According to AAA, the average U.S. retail diesel prices reached $4.89/gallon on Thursday, the highest level since December 2022.

Early Market Call – as of 9:00 AM EDT

WTI – Apr $95.27, down $4.16

RBOB – Apr $3.0120, down 5.3 cents

HO – Apr $3.9875, down 27 points

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