DTN Oil Update
Oil Rises as Supply Concerns Deepen on Iran War
SECAUCUS, N.J. (DTN) -- Crude and refined product futures resumed their upward trend on Tuesday, extending the rally triggered by the escalating Middle East conflict on news that Israel killed two senior Iranian officials and Tehran retaliated with new attacks on regional oil infrastructure.
At the close, WTI crude for April delivery settled up $2.71, or 2.9%, at $96.21 bbl, while the ICE Brent for May finished up $3.21, or 3.2%, at $103.42 bbl.
NYMEX ULSD futures for April delivery closed up $0.1783 at $4.0158 gallon. Front-month RBOB futures contract for April ended up $0.1231 at $3.1234 gallon,
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The U.S. Dollar Index retreated by 0.213 points to 99.255 against a basket of currencies, supporting the rally across energy markets.
The UAE said it is willing to join an international coalition proposed by U.S. President Donald Trump to protect oil tankers on the Strait of Hormuz blockaded by Iran.
The UAE made its stance after its main oil loading port Fujairah was repeatedly struck by Iranian drones. The decision also came after the reported deaths of Ali Larijani, secretary of Iran's Supreme National Security Council, and Gholamreza Soleimani, commander of an Iranian paramilitary volunteer from airstrikes carried out by Israel.
European nations and NATO have expressed reluctance in joining the coalition proposed for Hormuz, with the EU's foreign policy chief Kaja Kallas stating: "This is not Europe's war."
Trump expressed disappointment on Tuesday with that stance but said it will not impair the progress the U.S. was making in the war and at efforts in reopening the strait. "As soon as the war's over, oil prices will drop like a rock," the president told reporters at the White House.
The Hormuz has remained impassable to maritime traffic at large since the Feb. 27 start of the U.S.-Israel military campaign against Iran. Tehran has selectively allowed Iraqi- and Indian-flagged oil tankers on the waterway that during ordinary times provide passage to a fifth of the world's petroleum cargoes.
Crude futures have risen some 40% in the 18 days of the conflict, which has isolated about 20 million bpd of petroleum liquids from the Hormuz and world market, according to DTN pricing data and market tracking by the International Energy Agency (IEA). Global middle distillate supply has particularly been strained by the sudden loss of 4 million bpd in Middle Eastern flows. The supply crunch is worsened by China's decision to ban all fuel exports through March to fulfill domestic requirements, regional oil analysts said.
The decision by the EIA and the U.S to release more than 500 million bbl from emergency crude reserves has offset some of the supply strain.
In domestic news, market attention is expected to be focused on the release of two sets of inventory data for the week ended March 13 -- with preliminary figures due at 4:30 p.m. EDT today from the American Petroleum Institute, before the official numbers that arrive at 10:30 a.m. EDT Wednesday, March 18, from the Energy Information Administration (EIA).
In the prior week to March 6, the EIA reported that U.S. crude stocks climbed by 3.8 million bbl to 443.1 million bbl, reaching their highest for a week since May 2025.
The Federal Reserve's Open Market Committee meeting began today, with its decision on U.S. interest rates due Wednesday potentially influencing markets, particularly if the central bank decides to cut rates. The Fed's last rate cut came in December, and current market expectations point to no change, keeping rates within the 3.5% and 3.75% range.