By Giulia Petroni
Here is a look at what happened in oil markets in the week of March 16-20 and what the focus will be in the days to come.
OVERVIEW: Brent crude has retreated from this week's highs but continues to hold above $100 a barrel. Severe disruptions in the Strait of Hormuz and intensifying attacks on key energy infrastructure are keeping prices elevated, despite global efforts to mitigate the impact of the blockade. Both Brent and West Texas Intermediate are on track for weekly gains, though the spread between the two benchmarks has widened to its highest level in more than a decade.
MACRO: The Federal Reserve left interest rates unchanged on Wednesday and cautiously maintained its outlook for potential cuts later this year, even as rising energy costs linked to the Iran conflict threaten to complicate its prolonged battle against inflation. At the same time, wholesale inflation climbed to its highest level in a year last month, according to Labor Department data, underscoring persistent price pressures in the economy even before the Iran war began.
GEOPOLITICAL RISKS: Oil infrastructure has also come under attack, with drones striking the UAE's Fujairah hub and Saudi Arabia intercepting a missile aimed at its Yanbu port on the west coast. Meanwhile, the Strait of Hormuz remains effectively closed and the volume of shut-in production across the region is mounting.
Some factors are helping to ease pressure on prices, although only partially.
Treasury Secretary Scott Bessent said Washington is considering lifting sanctions on Iranian oil held at sea after doing the same for Russian barrels. The Trump administration also issued a temporary waiver to the Jones Act to facilitate domestic shipments.
Meanwhile, leading European nations, along with Japan and Canada, said they are prepared to help ensure safe passage through the Strait of Hormuz. The International Energy Agency already coordinated a record emergency stock release of around 400 million barrels, with the U.S. contributing more than 172 million barrels--the largest share.
These measures, however, are unlikely to fully offset the scale of the current disruption to global supply, according to market watchers. "The resumption of transit through the Strait of Hormuz is indispensable to relieve the strains on markets and to allow for stable flows of oil and gas to international markets," the IEA said.
SUPPLY AND DEMAND: There is currently no prospect of shipments through the strait resuming any time soon, market watchers said. Gulf producers have cut oil output by at least 10 million barrels a day, and without a swift resumption of shipping through the Strait of Hormuz, supply losses are expected to deepen.
"The volume of fuel supply offline now is higher than the supply loss during the oil shock of 1973," the IEA said.
The group of Western countries and their allies urged households, businesses and governments to take steps such as working from home and carpooling to reduce fuel consumption, stressing that managing demand is a critical component of energy security.
Meanwhile, the U.S. Energy Information Administration said U.S. crude oil stockpiles, excluding the Strategic Petroleum Reserve, rose by 6.2 million barrels to 449.3 million barrels in the week ended March 13, against expectations of a 40,000-barrel decline.
WHAT'S AHEAD: In the week ahead, investors will be watching a busy economic calendar for fresh signals on growth and inflation. The Purchasing Managers' Index reading will offer a snapshot of business activity across manufacturing and services, while a slate of Federal Reserve speeches could provide further clues on the outlook for interest rates this year. Weekly jobless claims will be closely monitored for signs of softening in the labor market, and the latest consumer sentiment data will shed light on how households are responding to price pressures and market volatility.
Oil market direction, however, remains firmly tied to developments in the Strait of Hormuz, with traders closely tracking any signs of recovery in flows through the key chokepoint. At the same time, market participants are watching for measures that could boost supply, including the potential lifting of sanctions on Iranian crude already at sea.
Write to Giulia Petroni at giulia.petroni@wsj.com
(END) Dow Jones Newswires
March 20, 2026 12:30 ET (16:30 GMT)
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