Oil Climbs as Iran Vows to Keep Strait of Hormuz Closed

Oil prices rise as Hormuz remains closed

• The WTI prompt-month contract rose $5.99 to $93.24/bbl on Thursday morning (7:30 AM CT)
• Iran’s new supreme leader, Ayatollah Motjaba Khamenei, said the Strait of Hormuz should remain closed in his first public remarks since succeeding his assassinated father
• Iran reportedly struck two vessels off the coast of Iraq, prompting Iraqi oil terminals to suspend operations in an escalation that is likely to further discourage global shipowners from attempting to transit the vital Strait of Hormuz
• The International Energy Agency estimates the conflict could reduce global oil supply by roughly 8 MMbbl/d this month, with flows through the Strait of Hormuz already down more than 90%
• In response to the disruption, the IEA agreed to coordinate a release of 400 MMbbl from emergency oil reserves, the largest drawdown in the agency’s history
• • However, IEA Executive Director Faith Birol emphasized that restoring transit through the Strait of Hormuz remains the most critical factor for stabilizing energy markets
  • As part of the coordinated effort, the Trump administration plans to release 172 MMbbl from the US Strategic Petroleum Reserve
• Goldman Sachs has again revised its oil price outlook, now expecting WTI to average $67/bbl in 4Q26, compared with its earlier forecast of $62/bbl for the same period

Natural gas prompt month is up 1.8c to $3.227/MMBtu. (As of 07:30 AM CT)

• L48 supply change day over day was negligible, while export demand and forecasted power and rescom demand gained
• • There were further drops in forecasted temperatures in the 11-15 day range this morning primarily in the Midwest, as the latter half of the forecast period continues cool (Criterion)
  • Some previously unexpected colder weather is hitting the south central this week, as the region lost 12.8°F in the 1-5 day forecast range this morning
• LNG feedgas is at a multiweek high of 20.5 Bcf/d
• • Sabine pass and Corpus Christi facilities led the gains, accounting for nearly all of the 468 MMcf/d surge
  • Sabine Pass is expected to undergo pigging maintenance on March 17th, which will temporarily restrict volumes

The EIA will release its weekly natural gas storage report today, with Bloomberg survey showing a median expectation of a -41Bcf withdrawal

• The five-year average withdrawal for this week is -64 Bcf