Amidst the growing tensions in West Asia, the Liberia-flagged oil tanker Shenlong Suezmax has successfully arrived at Mumbai Port, having navigated the perilous Strait of Hormuz. This docking on March 11, 2026, comes at a time when the geopolitical landscape is increasingly volatile. The high-risk passage underscores the challenges faced in maintaining energy supplies during such times of conflict.
Recent developments have heightened concerns over energy security. In particular, oil prices surged on Monday following Israeli Prime Minister Benjamin Netanyahu’s stark warning that the ongoing conflict with Iran is far from over. His statement has stoked fears of further escalation in the Middle East, a region critical to global energy supply chains.
Adding to the tension, U.S. President Donald Trump dismissed Iran’s proposal aimed at resolving the conflict with the United States and Israel. In a characteristically blunt response, he declared the offer “TOTALLY UNACCEPTABLE,” signaling a continued stalemate.
These geopolitical strains have had a tangible impact on the oil markets. In early trading, U.S. West Texas Intermediate futures for June delivery saw an increase of over 2%, reaching $97.88 per barrel. Similarly, Brent crude futures for July delivery climbed more than 2%, hitting $103.93 per barrel. Both WTI and Brent have experienced a substantial rise of approximately 40% since the conflict erupted on February 28, reflecting the market’s anxiety over supply disruptions.
U.S. West Texas Intermediate futures with June delivery advanced more than 2% to $97.88 per barrel by 7:39 a.m. ET. International benchmark Brent crude futures with July delivery rose more than 2% to $103.93.
WTI and Brent are both up around 40% since the U.S. and Israeli-led war against Iran started on Feb. 28.
Brent crude prices this year
“There’s still nuclear material, enriched uranium that has to be taken out of Iran,” Netanyahu said on Sunday in an interview on CBS’s “60 Minutes” that is set to air Sunday night. “There is still enrichment sites that have to be dismantled, there’s still proxies that Iran supports, there are ballistic missiles that they still want to produce … there’s work to be done.”
Asked how the U.S. and Israel would remove the nuclear material, Netanyahu replied: “You go in, and you take it out.”
Citi analysts wrote in their latest oil report that prices could rise further if Iran and U.S. do not agree a deal, adding that crude markets have been cushioned by high inventories, strategic petroleum reserve releases, weaker demand in developing economies and intermittent signs of possible de-escalation in the Middle East.
Citi maintained that risks to oil prices remain tilted to the upside, as Iran retains significant control over the timing and terms of any potential agreement to reopen the critical Strait of Hormuz energy route.
“We assume that the regime will make a deal that reopens the Strait around end-May … but we continue to see the risks skewed towards this timeline being pushed out and/or a partial reopening, which means disruptions for longer.”
‘Demand destruction’
Felipe Elink Schuurman, CEO and co-founder of Sparta Commodities, said the coronavirus pandemic serves as a good analogy for current developments in oil markets.
“In 2020, on average, we lost 9 million barrels per day of demand versus 2019, which is pretty much the equivalent of what we are losing now in terms of supply. So, the market will have to adjust, and we will have to get to that level of demand destruction,” Schuurman told CNBC’s “Squawk Box Europe” on Monday.
“Now the question is ‘where is that demand destruction going to come?’ And unfortunately, it’s going to be a situation where the richer countries are going to pay up. Maybe you don’t see $200 on crude, but you will see that on a regular basis on products, which is what people consume,” he continued.
“You are going to end up in a scenario where poorer countries are going to have a humanitarian crisis, Europe is going to have an economic crisis and the U.S., a political one.”
— CNBC’s Garrett Downs contributed to this report.
