March 12 International Crude Oil Opens with a Sharp Rise in Asian Trading Session

March 12th News

On March 12, the international crude oil market continued its strong momentum. After the Asian session opened, prices surged sharply. At one point, the price increase for WTI crude oil futures expanded to as much as 8%, currently trading at $94.14 per barrel. Brent crude oil futures saw a price increase of nearly 6%, approaching the $100-per-barrel mark, continuing the upward trend that began on March 11. The core driver behind this rally is growing supply concerns triggered by the escalation of geopolitical tensions in the Middle East, coupled with the market’s digestion of expectations regarding the release of strategic petroleum reserves by the International Energy Agency (IEA). Under the intense tug-of-war between bulls and bears, oil prices have risen strongly.

The sharp rally at the opening this time is the result of a confluence of multiple factors, with the escalating situation in the Middle East remaining the central driving force. On March 11, Iran explicitly stated that it would end its “proportionate retaliation” and instead launch “chain reactions,” designating U.S. vessels and oil cargoes—as well as those belonging to its allies—as legitimate targets for attack. Iran also reaffirmed its capability to completely shut down the Strait of Hormuz. As the lifeline of global energy, this strait handles roughly one-quarter of the world’s seaborne oil shipments. The continued restrictions on passage through the strait have directly intensified concerns about a widening global crude oil supply gap.

The tight supply situation is further exacerbated: Although Saudi Aramco has activated the "East-West Pipeline" to reroute crude oil exports via the Red Sea port of Yanbu, the port’s maximum daily loading capacity falls short of 1.5 million barrels. Moreover, the Red Sea route faces ongoing threats from Houthi armed attacks, making it impossible to offset the supply gap caused by restrictions on passage through the Strait. Additionally, the Caspian Pipeline Consortium has cut its March crude oil export plan by 15%, and several oil-producing countries have been forced to shut down production due to insufficient inventories (at least 5 million barrels per day on average), further widening the supply gap.

The IEA’s emergency release of strategic oil reserves failed to effectively curb rising oil prices. On March 11, the 32 member countries of the IEA agreed to release 400 million barrels from their strategic petroleum reserves—the largest-ever release—but the market response was muted. After a brief drop in oil prices, crude oil prices quickly rebounded, with WTI and Brent crude closing up 4.55% and 4.76%, respectively, on March 11. The core reason is that the 400-million-barrel release can only provide a three-week buffer and will be implemented in stages, making it difficult to offset the daily supply loss of 15 million barrels. Meanwhile, the market is also concerned that subsequent replenishment of inventories could further drive up oil prices.

Although demand-side growth is not significant, the global rigid demand for crude oil, coupled with marginal improvements in regional markets, continues to provide support. Refining and chemical demand in Asia is gradually recovering, and procurement demand remains stable. February CPI data from the U.S. indicate ongoing inflationary pressures; market expectations that rising oil prices will exacerbate inflation have prompted capital flows into crude oil as a safe-haven asset, further boosting oil prices.

Market sentiment and liquidity conditions remain bullish, prompting short sellers to collectively close their positions and exit the market. Major institutions are now raising their oil price forecasts: J.P. Morgan warns that if navigation through the Strait remains unsecured, daily supply losses could reach as much as 12 million barrels over the next two weeks. Bernstein has raised its 2026 Brent crude oil forecast to $80 per barrel, with the conflict’s prolonged duration potentially driving prices up to $120–$150 per barrel.

Looking ahead, crude oil analysts believe that oil prices will remain strong in the short term, with Brent crude likely to challenge previous highs. The trading logic remains the progress of geopolitical conflicts in the Middle East. At the same time, it is necessary to be cautious of bearish factors: the gradual implementation of IEA's reserve release, a decrease in geopolitical premiums due to easing conflicts, and high oil prices suppressing demand recovery. For the Chinese market, the rise in international oil prices will be transmitted to the energy and chemical industry chain, pushing up the prices of related products and refined oil.