SINGAPORE, March 15 — Oil prices could extend gains at Monday's open as the United States (US)-Israeli war against Iran entered a third week, putting oil infrastructure at risk and keeping the Strait of Hormuz shut in the world's largest supply disruption.
US President Donald Trump threatened further strikes on Iran's Kharg Island oil export hub, drawing a defiant response of further retaliation from Tehran.
Brent and U.S. West Texas Intermediate crude futures have already spiked sharply, rattling global financial markets. Both contracts have surged more than 40 per cent so far this month to their highest levels since 2022 after the US-Israeli attacks on Iran prompted Tehran to halt shipping through the Strait of Hormuz — a key chokepoint for a fifth of global oil supply.
Trump has urged China, France, Japan, South Korea, the United Kingdom, and others to deploy warships to secure the strategic gateway.
The US struck military targets on Kharg Island on Saturday, which was swiftly followed by Iranian drone attacks on a key oil terminal in the United Arab Emirates (UAE).
"This marks an escalation in the conflict. Until now, the region’s oil infrastructure has largely been spared," said JP Morgan analysts led by Natasha Kaneva.
Besides the UAE's Fujairah, Saudi Arabia's Ras Tanura export terminal and Abqaiq oil processing facilities have been listed as critical and highly vulnerable energy nodes in the Gulf.
However, on Sunday, a Fujairah-based industry source told Reuters that oil loading operations at Fujairah have resumed.
Fujairah, outside the Strait of Hormuz, is the outlet for about one million barrels per day (bpd) of the UAE's flagship Murban crude oil — a volume equal to about one per cent of world demand.
The International Energy Agency (IEA) has stated that global oil supply is expected to fall by eight million bpd in March due to shipping disruptions, while Middle Eastern producers have cut output by at least 10 million bpd.
Last week, the IEA agreed to release a record 400 million barrels of oil from strategic stockpiles held by member nations to combat price spikes. Japan plans to start releasing its oil on Monday.
Meanwhile, three sources familiar with the efforts said that the Trump administration has rebuffed efforts by Middle Eastern allies to start diplomatic negotiations, while Iran has rejected the possibility of any ceasefire until US and Israeli strikes end, dimming hopes of a quick end to the conflict.
