Market Report Week 13 - 24.03.2026

The new 5-day deadline, which came after the comments on Friday, stated that “we are getting very close to meeting our objectives … [and] we consider winding down our great military efforts in the Middle East with respect to the terrorist regime of Iran”. Hence, the tougher 48-hour rhetoric from Saturday has already been ditched by Trump. However, in reality, there is no easing of tensions, as Iran has rejected Trump's claims that Iran and the US are talking. The bombings are also continuing. 

We can also conclude that Iran is far from defeated. Over the weekend, we have seen further missile attacks on Israel, and Iran appears to have improved its ability to overwhelm the Israeli Iron Dome missile defence system. On Sunday, the UK/US base in Diego Garcia was targeted by two missiles. Both were intercepted, but the capability to strike a base 4,000 km away has surprised military experts.

The situation is likely to escalate further in the coming week. Iran has demonstrated that it follows through on its threats. The new 5-dayr deadline will again make markets  nervous, particularly as Iran has already rejected any peace talks. We would not be surprised to see the Houthis in Yemen being activated, potentially disrupting Saudi Arabia’s ability to load oil at Yanbu on the Red Sea. Currently, Saudi Arabia is attempting to move up to 5 mb/d of crude across the country to Yanbu to circumvent the Strait of Hormuz.

The risk of a physical shortage of crude oil, refined products, and LNG/LPG is expected to intensify in the coming weeks. Only a limited number of vessels from the Middle East are scheduled to arrive in Asia and Europe over the next two weeks. We expect a bidding war between Europe and Asia, particularly for LNG, but also for diesel, jet fuel, and bunker fuels. We see very little possibility of an opening of the Strait of Hormuz over the coming weeks.

Fuel switching is likely to become an increasingly important theme. The LNG/LPG situation is already critical in parts of Asia, and power producers may begin switching to fuel oil for electricity generation. Relative to LNG, fuel oil remains attractively priced, pointing to potentially stronger demand for fuel and bunker oil.

Finally, markets appear to overestimate the volume of oil available at sea. The US has lifted sanctions on Russian crude loaded on vessels no later than 12 March and, somewhat surprisingly, also on Iranian oil at sea. However, the volume of oil that is not already sold or committed is likely lower than expected. In addition, payment restrictions have reportedly not been lifted, and the US Treasury Secretary has indicated that Iran will face difficulties accessing revenues. In practice, this means that China remains the primary buyer of Iranian oil, as it already is.
The US has suggested that the sanctions waiver could unlock up to 140 million barrels, but the actual volume is likely significantly lower and, in reality, only a drop in the ocean. As with the release of strategic oil stocks, this represents short-term symptom relief rather than a solution to the underlying problem: the continued closure of the Strait of Hormuz.