Oil prices rise as supply disruptions dwarf reserve release
USOIL Analysis
The US-Israel strikes and Iranian counterattacks continue unabated, dashing hopes for a resolution. President Trump has demanded unconditional surrender [1] and called the election of Mojtaba Khamenei as the new Supreme Leader a "big mistake", speaking on NBC [2]. Iran's new leader is seen as a hardliner, complicating prospects for a diplomatic solution. Reflecting this firm stance, President Pezeshkian said the only way to end the war is through recognition of Iran's "legitimate rights, payment of reparations, and firm international guarantees". [3]
The conflict continues to disrupt oil flows as the Strait of Hormuz remains effectively shut, depriving the world of around 20 million barrels of petroleum liquids per day [4]. The UK Maritime Trade Operations (UKMTO) has also reported multiple attacks on tankers in the region [5]. Kuwait Petroleum Corporation has announced reductions in production and refining [6], UAE's Abu Dhabi National Oil Company said it is "carefully managing offshore production levels" as storage fills up [7], and Iraq has announced the suspension of its oil terminals [8].
In an attempt to address the shortages, President Trump announced the lifting of sanctions until the situation normalizes [9] and authorised the release of 172 million barrels from the Strategic Petroleum Reserve (SPR) [10]. Members of the International Energy Agency (IEA) agreed to release a total of 400 million barrels (including the US). [11]
Nonetheless, these actions have failed to calm markets and may in fact have created fresh anxiety, as their sheer scale signals concern over a lasting energy shock that would tighten supply further. As a result, USOil has risen again following the announcement. WTI is attempting to reclaim the $100 per barrel level, keeping the road open to new multi-year highs. Volatility is likely to persist, however, and USOil remains susceptible to pullbacks toward the EMA200 that could challenge bullish momentum.
The reversal of sanctions and the sizeable reserve releases by the US and IEA may still offer near-term relief, and a well-supplied market could absorb the disruptions if they prove short-lived. President Trump said this week that the strikes could be over "very soon"[9], viewing the military campaign as a success. This raises hopes for an end to the conflict that would allow transit through the Strait of Hormuz to resume and the market to return to normalcy. Moreover, stgflation risks from lasting high energy prices can eventually lead to demand destruction.
Nikos Tzabouras
Senior Financial Editorial Writer
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. With extensive experience in market analysis and a strong foundation in international relations, he brings a unique perspective to financial markets. Nikos emphasizes not only technical analysis but also on fundamentals and the growing influence of geopolitics on financial trends.
As a Senior Financial Editorial Writer, he delivers comprehensive and forward-looking insights across a wide range of asset classes, including equities, commodities, and currencies. His work explores how macroeconomic events, political developments, and global policies impact market dynamics, providing readers with a deeper understanding of both short-term movements and long-term trends.
References
| Retrieved 12 Mar 2026 https://truthsocial.com/@realDonaldTrump/posts/116182551337254643 | |
| Retrieved 12 Mar 2026 https://www.nbcnews.com/politics/donald-trump/trump-seizing-iran-oil-rcna262437 | |
| Retrieved 12 Mar 2026 https://x.com/drpezeshkian/status/2031794088526168170 | |
| Retrieved 12 Mar 2026 https://www.eia.gov/todayinenergy/detail.php | |
| Retrieved 12 Mar 2026 https://www.ukmto.org/recent-incidents | |
| Retrieved 12 Mar 2026 https://x.com/kpcofficialkw/status/2030282290635407790 | |
| Retrieved 12 Mar 2026 https://www.zawya.com/en/press-release/companies-news/adnoc-group-update-on-continued-operations-ehk8ijl1 | |
| Retrieved 12 Mar 2026 https://ina.iq/en/local/46480-gcpi-director-general-iraqi-oil-terminals-fully-suspended-commercial-ports-remain-operational.html | |
| Retrieved 12 Mar 2026 https://www.youtube.com/watch | |
| Retrieved 12 Mar 2026 https://www.energy.gov/articles/united-states-release-172-million-barrels-oil-strategic-petroleum-reserve | |
| Retrieved 20 May 2026 https://x.com/IEA/status/2031742194441203815 |
Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed here.