Oil Falls 2% as Iran Weighs U.S. Peace Proposal

Oil prices dropped about 2% (Brent at $102.22, WTI at $90.32) as Iran reviews a U.S. proposal to end the war, though uncertainty remains high amid conflicting signals from both sides. Despite the dip, the closure of the Strait of Hormuz continues to choke off around 20 million bpd, marking the largest supply disruption in history and a cumulative loss of roughly 500 million barrels since late February. Extreme volatility persists, with prices swinging sharply on geopolitical headlines.

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Headlines

· Oil Falls 2% as Iran Weighs U.S. Peace Proposal

· Trump warns of harsher strikes on Iran as U.S. troop movements raise ground attack fears

· Trump Administration Assesses Effects of Oil Hitting $200 per Barrel

· Thai Tanker Secures Safe Passage Through Strait of Hormuz After Iran Talks

· Iraq Oil Output Plunges 80%

· U.S. Crude Stocks Surge by 6.9M Barrels as Fuel Trends Diverge

· U.S. Waives Summer Fuel Rules to Curb Rising Gasoline Prices

· US Allows South Korea to Pay for Russian and Iranian Oil in Non-Dollar Currencies

· Asia Turns to COVID-Era Measures to Tackle Fuel Crisis

· India Buys 60 Million Barrels of Russian Oil for April

· Japan Ramps Up Refinery Runs and Seeks More Oil Stockpile Releases

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Trump warns of harsher strikes on Iran as U.S. troop movements raise ground attack fears

Donald Trump warned that the U.S. would strike Iran “harder than ever” if Tehran does not accept military defeat, while ongoing troop deployments in the region are fueling concerns of a potential ground invasion despite parallel diplomatic efforts. The White House, through Karoline Leavitt, said talks with Iran have been “productive,” but Iran has rejected negotiations and threatened severe retaliation if U.S. forces enter its territory. Military scenarios under consideration include seizing key oil infrastructure such as Kharg Island, targeting nuclear assets, or breaking Iran’s control over the Strait of Hormuz, all of which analysts warn are highly risky and could lead to heavy casualties and broader escalation. Meanwhile, thousands of additional U.S. troops, including Marine units and elements of the 82nd Airborne Division, are being deployed, raising alarm among U.S. lawmakers and allies, as fears grow that the conflict could evolve into a prolonged and costly ground war reminiscent of past Middle East interventions.

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Trump Administration Assesses Effects of Oil Hitting $200 per Barrel

Trump administration officials have examined potential scenarios where oil prices spike to $200 a barrel to assess economic fallout amid the Iran war, though White House spokesman Kush Desai denied any current concern at that level. The analysis is part of routine contingency planning during times of strain, with Treasury Secretary Scott Bessent and other senior officials monitoring risks from oil and gasoline swings.

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Thai Tanker Secures Safe Passage Through Strait of Hormuz After Iran Talks

A Thai tanker successfully transited the Strait of Hormuz this week after Thailand secured safe passage through talks with Iran, with no payment required. The vessel had been anchored in the Gulf since March 11, following a previous incident in which another Thai ship, Mayuree Naree, was hit by a projectile. Iran permits “non-hostile” vessels to pass if coordinated with its authorities, and Thailand also collaborated with Oman to ensure the crossing. Meanwhile, India continues to load LPG onto stranded vessels, with several carriers already passing through the Gulf, some under Iranian navy escort.

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Iraq Oil Output Plunges 80% as Storage Fills and Hormuz Exports Stall

Iraq’s oil production has collapsed by about 80% to ~800,000 bpd from pre-war levels of 4.3 million bpd, as exports through the Strait of Hormuz remain blocked and storage tanks reach critical capacity. The government has ordered major operators like BP and Eni to cut output at key fields such as Rumaila and Zubair, with reductions including 100,000 bpd and 70,000 bpd respectively. Earlier cuts had already reduced output to 1.3 million bpd, but worsening storage constraints forced deeper curbs. Officials warn further production cuts are likely if the Hormuz disruption persists.

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U.S. Crude Stocks Surge by 6.9M Barrels as Fuel Trends Diverge

Data from the Energy Information Administration showed U.S. crude inventories jumped 6.9 million barrels to 456.2 million, far exceeding expectations and marking the largest build in weeks, while stocks at Cushing rose 3.4 million barrels. Distillate inventories also unexpectedly increased by 3 million barrels, signaling weaker-than-expected demand despite global supply disruptions. In contrast, gasoline stocks fell 2.6 million barrels, supported by stronger consumption. The mixed data surprised markets, especially as Middle East supply losses tied to the Strait of Hormuz crisis were expected to boost U.S. exports, but oil prices remained under pressure amid broader geopolitical uncertainty.

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U.S. Waives Summer Fuel Rules to Curb Rising Gasoline Prices

The Environmental Protection Agency will temporarily suspend anti-smog rules on summer gasoline, allowing broader sales of E15 (15% ethanol blend) to help lower fuel costs amid the Iran war-driven energy spike. The waiver, effective for 20 days from May 1, could cut pump prices by several cents as U.S. gasoline averages around $3.98 per gallon, up more than $1 from a month ago. The move supports both the biofuels and oil industries while aiming to stabilize supply disrupted by the Strait of Hormuz crisis, which has blocked a significant share of global oil flows.

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Asia Turns to COVID-Era Measures to Tackle Fuel Crisis

Asian countries are considering work-from-home policies, reduced travel, and energy-saving campaigns—similar to COVID-era measures—as they respond to fuel shortages caused by disruptions in the Strait of Hormuz, through which over 80% of Asia’s oil imports pass. Governments are also rolling out subsidies and financial support to ease rising living costs, while some nations have already shortened workweeks or declared energy emergencies. The IEA has urged demand-reduction steps like remote work and less air travel to stabilize markets. However, unlike during COVID, central banks face a dilemma as they may need to raise interest rates to combat inflation despite slowing economic growth.

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Japan Ramps Up Refinery Runs and Seeks More Oil Stockpile Releases

Japan raised refinery utilization to 73.3% as it began releasing oil stockpiles from March 16 to offset Middle East supply disruptions, while gasoline prices eased slightly after government subsidies despite recently hitting record highs. Sanae Takaichi also asked the IEA to prepare additional coordinated stockpile releases beyond the already agreed 400 million barrels, signaling concern that the crisis may persist, as the ongoing closure of the Strait of Hormuz continues to disrupt flows and leaves 45 Japan-related ships stranded in the region.

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India Buys 60 Million Barrels of Russian Oil for April

India has secured about 60 million barrels of Russian oil for April delivery, taking advantage of a U.S. waiver to offset shortages caused by disruptions in the Strait of Hormuz, with cargoes priced at premiums of $5 to $15 per barrel to Brent. The buying marks a sharp rebound from earlier cuts under U.S. pressure, as refiners such as Mangalore Refinery & Petrochemicals Ltd. and Hindustan Mittal Energy Ltd. return to Russian crude amid constrained Middle East supplies, including shipments from Saudi Arabia and Iraq trapped in the Gulf. At the same time, India is diversifying further by increasing Venezuelan imports.

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UK Authorizes Military to Seize Russian ‘Shadow Fleet’ Oil Tankers

Keir Starmer has authorized the UK military to board and detain Russian oil tankers suspected of evading sanctions through a “shadow fleet,” aiming to cut off funding for Vladimir Putin’s war in Ukraine. The UK has already sanctioned 544 such vessels, which are estimated to carry about three-quarters of Russia’s crude exports. Some of these ships pass through the English Channel, raising enforcement stakes. Authorities may pursue criminal charges against violators, as Europe intensifies efforts to curb Russia’s oil revenues amid rising global prices.

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Ukrainian Drone Attack Sparks Fire at Russia’s Ust-Luga Baltic Port

A Ukrainian drone strike has ignited a major fire at Russia’s Ust-Luga Baltic oil export terminal, marking the second key western port targeted after Primorsk. Governor Alexander Drozdenko confirmed the fire, while 56 drones were shot down over the region. No casualties or cargo vessel damages have been reported. In 2025, Ust-Luga handled 130.5 million tonnes of cargo, including crude, oil products, chemicals, ammonia, urea, coal, and grains. The incident comes amid ongoing disruptions to Russian oil exports and recent US moves to lift sanctions on oil already at sea due to Middle East tensions.

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40% of Russia’s Oil Export Capacity Halted After Ukrainian Attacks

Ukraine’s intensified drone strikes and related disruptions have shut down at least 40% of Russia’s oil export capacity (~2 million bpd), marking one of the most severe supply shocks in Russia’s modern history. Key infrastructure including Baltic ports (Primorsk, Ust-Luga), the Black Sea terminal at Novorossiysk, and the Druzhba pipeline have been hit, while tanker seizures have further disrupted about 300,000 bpd of Arctic exports. With oil revenues accounting for roughly 25% of Russia’s state budget, the impact is significant, forcing Moscow to redirect flows toward Asia, though limited capacity constrains this shift. Russia continues exporting via eastern routes totaling about 1.9 million bpd, alongside 250,000 bpd from Sakhalin and 300,000 bpd to Belarus, partially offsetting losses.

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Post-Iran War Rebuild Could Spark Massive Energy & Infrastructure Boom

The end of the Iran war is expected to trigger a huge reconstruction race across the Middle East, with over 40 major energy assets in multiple countries severely damaged, according to the IEA. Engineering giants like SLB, Halliburton, Baker Hughes and Bechtel are likely to lead rebuilding of pipelines, refineries and gas facilities, while regional players such as Mapna Group will play key domestic roles. Oil majors including Exxon Mobil, TotalEnergies and Shell are expected to re-enter to restore production once infrastructure is repaired. At the same time, reopening the Strait of Hormuz and rebuilding damaged ports, power grids, and water systems will require specialized shipping, logistics and utility firms, making the recovery a multi-year, multi-billion-dollar opportunity shaped heavily by geopolitical influence.

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Iran War Shakes Foundations of Gulf ‘Petrodollar’ System

The Iran war is raising serious doubts about the long-standing “petrodollar” system, where Gulf states relied on U.S. security in exchange for pricing oil in dollars and reinvesting massive revenues into U.S. assets. With missile attacks exposing limits in U.S. protection, confidence in this arrangement is weakening. The system’s three pillars—U.S. dependence on Middle East oil, dollar-based oil trade, and security guarantees—are all under strain, especially as the U.S. is now a net energy exporter and Asia becomes the Gulf’s main customer. Countries like China and India are gaining influence, with growing discussion of shifting toward alternative systems like “petroyuan.” The region holds around $800 billion in dollar reserves and over $6 trillion in sovereign wealth assets, much of it tied to the U.S., meaning any shift could have major global financial implications. The crisis around the Strait of Hormuz and ongoing energy disruptions may accelerate this transition, potentially reshaping the global monetary order over the long term.

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US Allows South Korea to Pay for Russian and Iranian Oil in Non-Dollar Currencies

The South Korean government has received official confirmation from the US Treasury that payments for Russian and Iranian crude and naphtha can be made in non-dollar currencies, such as rubles, yuan, or dirhams, without triggering secondary sanctions on Korean companies. Domestic refiners and petrochemical firms are expected to move quickly to secure Russian naphtha, with even a single cargo expected to significantly ease supply constraints. The government also said it will intervene if EU secondary sanctions create obstacles for exports. Meanwhile, some of Qatar’s LNG facilities are damaged, requiring long-term repairs, but the impact on South Korea’s supply is expected to be limited. Authorities are also monitoring potential global gas price hikes, which could pressure electricity and city gas rates. Strategic oil reserves are being carefully managed as a last-resort safety measure rather than for market stabilization.

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SK Shipping Lists Two VLCCs and an MR Tanker for Sale Amid Strong Market

South Korea’s SK Shipping, owned by private equity firm Hahn & Co, is selling three vessels: two scrubber-fitted VLCCs—C Innovator (314,000-dwt, 2012) and C Progress (314,000-dwt, 2013)—and an MR tanker, Pro Onyx (50,000-dwt, 2019). Bids are due by 26 March. The VLCCs are currently on charter to Mercuria and Koch Industries, with options extending to 2027–2028, while Pro Onyx operates under a five-year Cargill charter. The vessels’ market values are roughly $93m each for the VLCCs and $45.8m for the MR tanker. Last month, Pan Ocean reportedly bought 10 VLCCs from SK Shipping, expanding its large-tanker fleet. Under Hahn & Co’s management since 2018, SK Shipping’s operating profit increased more than fivefold, reflecting a shift from spot trading to long-term contracts.

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Maria Angelicoussis-linked Maran Tankers Orders VLCCs and LNG Carriers at Hanwha Ocean

Maran Tankers, led by Maria Angelicoussis, is linked to recent orders at South Korea’s Hanwha Ocean, including three VLCCs worth $393.2m and two LNG carriers worth $505.2m, set to be delivered by 2029. The contracts are expected to raise Hanwha Ocean’s 2026 revenue by about 12.5% and increase its orderbook to seven VLCCs and four LNG carriers. Maran has previously used Hanwha Ocean for VLCC orders, highlighting a strong partnership. Separately, Hanwha Ocean entered the Greek naval and maritime defence sector through an exclusive partnership with ONEX Shipyards, covering submarine and other naval programmes for the Hellenic Coast Guard and Navy.