Oil pushed higher as traders braced for the Iran war to stretch into April and attacks continued across the Middle East, with transit through the critical Strait of Hormuz still largely halted.
Global benchmark Brent rose near $111 a barrel after erasing an earlier drop, while West Texas Intermediate was above $96. US president Donald Trump pushed back a deadline for striking Iran’s energy infrastructure by 10 days, prolonging uncertainty over the course of the war well into next month.
The extension allows more time for talks, but also for the US to amass additional forces in the region. That includes Marine Expeditionary Units and soldiers from the US Army’s 82nd Airborne Division, according to people familiar with the matter. The Wall Street Journal said the Pentagon is looking at sending as many as 10,000 extra ground troops.
Brent crude is on pace for a record monthly gain in March, as the war between the US, Israel and Iran rocks the oil-rich Middle East. With Tehran forcing the near-complete closure of the Strait of Hormuz, the conflict has severely restricted flows of energy that are vital to the global economy.
Attacks are continuing. Among them, Israel said it struck Iran’s primary facility for the production of missiles and sea mines in the city of Yazd, while Kuwait said on Friday that drones targeted Shuwaikh port, resulting in damage, and Mubarak Al Kabeer port came under a missile and drone attack. Saudi Arabia intercepted drones in its eastern region.
While there was a roughly 60% probability of the war finishing by end-March, there were 40% odds of a longer conflict, possibly through June, according to Macquarie analysts. The latter scenario could drive oil to $200 a barrel, they said in a research note.
Are Government's fuel measures betting on a quick resolution to the conflict in Iran?
This week the Government introduced a €250 million package of measures to help businesses and households with their fuel bills over the next couple of months.But will it be enough? And is it merely a bet by Government on the Iran conflict being resolved quickly?Joining host Ciarán Hancock in studio to tease this out are Cliff Taylor of The Irish Times and Fergal O’Brien, director of lobbying and influence at employers group Ibec.But the episode starts with Irish times political correspondent Cormac McQuinn taking us through the various fuel measures introduced by Government. Produced by John Casey with JJ Vernon on sound.
The Trump administration is also trying to arrange a meeting for vice president JD Vance in Pakistan this weekend to discuss an off-ramp to the war in Iran.
Iran said on Thursday, through the Tasnim news agency, that it is waiting for a response after rejecting a 15-point US plan to end the war and offering its own conditions. Those include recognition of Tehran’s authority over Hormuz, which links the Persian Gulf to global markets.
The vital waterway carried about a fifth of global oil flows before the war started at the end of February. Despite the broader standstill, there has been a recent marginal increase in Iran-linked ships – mostly bulk carriers and LPG vessels – attempting to pass through. Two large container ships linked to China attempted to exit the Persian Gulf on Friday through the Strait of Hormuz, before making an abrupt U-turn near Iran and motoring back.
The United Arab Emirates has told the US and other allies it would participate in a multinational maritime taskforce intended to reopen the strait, the Financial Times reported, citing three people familiar with the situation. Abu Dhabi would deploy its own navy, two of the people said.
On Thursday, Trump said that Iran had allowed 10 oil tankers to sail through the strait as a goodwill gesture. Treasury Secretary Scott Bessent, meanwhile, said that an insurance program meant to boost shipping through the artery would begin soon.
Brent has surged by about 53 per cent so far in March, and petroleum product costs from diesel to jet fuel have rallied even more, burdening businesses and consumers. The increases have triggered concern about a simultaneous spike in global inflation and slowdown in growth.
Across the Asia-Pacific region, India cut taxes on diesel and gasoline to cushion the impact of surging crude prices on its refiners, and Vietnam froze some fuel levies until mid-April. New Zealand said there was evidence of increased demand, partially from hoarding or stockpiling. – Bloomberg
