Oil surge rattles markets

Oil’s jump back above $100 a barrel has turned a stock-market wobble into a broader inflation scare, with traders now pricing war risk into everything from fuel to interest rates. (cnbctv18.com) Brent crude rose above $105 in early trading on March 16, and by March 30 it had surged as high as $116.5 a barrel, near its earlier war highs. West Texas Intermediate, the main U.S. benchmark, also crossed $100 for nearby contracts during the same run-up. (cnbctv18.com; cnbctv18.com) The move followed a widening Middle East conflict that the International Energy Agency dates to February 28, 2026. On March 11, the agency said its 32 member countries would release 400 million barrels from emergency reserves after oil flows through the Strait of Hormuz fell to less than 10% of pre-conflict levels. (iea.org) That waterway matters because it is the main exit for Gulf oil. The U.S. Energy Information Administration said 20 million barrels a day moved through the Strait of Hormuz in 2024, equal to about 20% of global petroleum liquids consumption, with few practical alternatives if shipping is disrupted. (eia.gov) The International Energy Agency put the strait’s 2025 traffic at 20 million barrels a day, or about a quarter of the world’s seaborne oil trade. When that route tightens, refiners, shipping firms and central banks all have to assume higher energy costs will spread through the rest of the economy. (iea.org) Markets are reacting that way now because oil shocks can reverse progress on inflation just as rate-setters are meeting again. The Federal Reserve lists its next policy meeting for April 28-29, 2026, and the Bank of England says it will publish its April decision and minutes on April 30, 2026. (federalreserve.gov; bankofengland.co.uk) There is still a debate over how much of the move is a lasting supply loss and how much is fear-driven volatility. Haris Khurshid of Karobaar Capital said the Houthis’ entry into the war adds risk through shipping and Red Sea routes, but said a broader hit to Gulf infrastructure or Hormuz flows would be needed for a deeper supply shock. (cnbctv18.com) Others are preparing for a longer disruption. Macquarie said in a March 28 note that oil could reach $200 a barrel if the war lasts into June, and assigned that scenario a 40% probability. (cnbctv18.com) The immediate test is whether emergency stock releases and any diplomatic progress can keep crude from making another run at its March peak. If they cannot, the same oil surge that knocked stocks off their footing could land in gasoline, freight bills and the next round of inflation data. (iea.org; federalreserve.gov)