World oil prices rose by more than 2%, with Brent crude surpassing $102 per barrel.
Brent and WTI crude oil prices both rose by more than 2% in trading on March 17th due to concerns about supply cuts caused by disruptions to operations in the Strait of Hormuz.
World oil prices recorded a gain of more than 2% in Tuesday morning trading (March 17), reversing some of the previous day's decline. The main reason identified was concerns about global energy supply as the Strait of Hormuz – the world's most important shipping lane – was almost completely closed.
High volatility on energy exchanges.
Specifically, Brent crude oil prices rose $2.48, or 2.5%, to $102.69 per barrel. At the same time, West Texas Intermediate (WTI) crude oil prices increased $2.42, or 2.6%, to $95.92 per barrel. This represents a significant recovery after both types of oil fell by 2.8% and 5.3% respectively in the previous trading session.
Supply pressure from the Strait of Hormuz and the UAE.
Severe disruptions in the Strait of Hormuz have sparked widespread concerns about energy shortages. This strategic choke point carries approximately 20% of the world's total oil and liquefied natural gas (LNG). The closure of the strait not only increases energy costs but also fuels global inflationary pressures.
Notably, the United Arab Emirates (UAE), the third-largest producer in the Organization of Petroleum Exporting Countries (OPEC), has had to partially halt production. The closure of the strait effectively forced the country to cut its crude oil output by half compared to normal levels.
Major banks raise long-term oil price forecasts.
Given the complex developments in the Middle East, many international financial institutions have adjusted their oil price forecasts for the coming period. Bank of America (BofA) recently raised its 2026 Brent crude oil price forecast to $77.50 per barrel, a significant increase from its previous forecast of $61 per barrel. Similarly, Standard Chartered also adjusted its forecast from $70 to $85.50 per barrel.
In its latest report, BofA presents two scenarios that are equally likely to occur:
- Scenario 1:If the situation is resolved quickly and oil flows are restored by April, Brent crude prices could stabilize around $70 per barrel.
- Scenario 2:If the disruption extends into the second quarter, oil prices could remain high, fluctuating around $85 per barrel.
The market is currently closely monitoring developments in the Middle East, where any incidents at maritime bottlenecks could immediately alter the global energy price chart.
