On March 12th, the international crude oil market continued to be strong, with a significant surge after the opening of the Asian session. WTI crude oil futures rose to 8% at one point, now reporting $94.14 per barrel, while Brent crude oil futures rose nearly 6%, approaching the $100 per barrel mark, continuing the upward trend on March 11th. The core driving force is the supply concerns brought about by the escalation of geopolitical conflicts in the Middle East, coupled with market digestion of the International Energy Agency's (IEA) strategic oil reserve release expectations, and the strong upward trend of oil prices under the long short game.
The sharp rise at the opening this time is the result of multiple factors resonating, and the escalation of the situation in the Middle East remains the core theme. On March 11th, Iran made it clear that it would end its "reciprocal counterattack" and carry out a "chain of strikes", listing the ships and oil cargo of the United States and its partners as legitimate targets, and reiterating its ability to completely close the Strait of Hormuz. As the lifeline of global energy, the strait carries about a quarter of the world's offshore oil transportation volume, and its continued restrictions on passage directly exacerbate concerns about the global crude oil supply gap.
The tense situation on the supply side is further compounded: although Saudi Aramco has used the "East West Pipeline" to divert to Yanbu Port in the Red Sea for export, the maximum daily loading capacity of the port is less than 1.5 million barrels, and the Red Sea route is facing armed attacks from the Houthis, which cannot make up for the supply gap caused by restricted passage in the strait; The Caspian Pipeline Alliance plans to cut crude oil exports by 15% in March, coupled with some oil producing countries shutting down production capacity due to insufficient inventory (at least 5 million barrels per day), further exacerbating the supply gap.
The emergency release of storage by IEA did not effectively curb the rise in oil prices. On March 11th, the 32 member countries of the IEA agreed to release 400 million barrels of strategic oil reserves (the largest in history), but the market reaction was lukewarm, and oil prices quickly rebounded after a short-term decline. On March 11th, WTI and Brent crude oil closed up 4.55% and 4.76% respectively. The core reason is that the release of 400 million barrels of reserves can only support a three week buffer, and the phased implementation is difficult to alleviate the daily supply loss of 15 million barrels. The market is also concerned that the subsequent replenishment of inventory will further push up oil prices.
Although there is no significant increase on the demand side, the combination of rigid global crude oil demand and regional marginal improvement provides support. Asian refining demand is gradually recovering, and procurement demand is stable; The February CPI data in the United States shows inflationary pressure, and the market expects that rising oil prices will exacerbate inflation. Funds are flowing into crude oil as a safe haven, further boosting oil prices.
Market sentiment and funding continue to rise, with short positions being concentrated and closed. Major institutions have raised their oil price expectations: JPMorgan warns that if there is no guarantee of cross-strait navigation, supply losses may reach 12 million barrels in the next two weeks; Bernstein has raised its forecast for Brent crude oil in 2026 to $80 per barrel, with the possibility of a prolonged conflict rising to $120-150 per barrel.
Looking ahead to the future, crude oil analysts from SunSirs believe that oil prices will remain strong in the short term, and Brent crude oil is expected to challenge previous highs. The trading logic is still based on the progress of geopolitical conflicts in the Middle East. At the same time, we need to be wary of negative factors: the gradual release of IEA reserves, the easing of conflicts leading to a decline in geopolitical premiums, and high oil prices suppressing demand recovery. For the domestic market, the rise in international oil prices will be transmitted to the energy and chemical industry chain, pushing up the prices of related varieties and finished oil products.
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