Impact Assessment of US/Israel-Iran Conflict

Market / War Update

• Israeli strike kills top Iranian official — Israel announced the elimination of Iran's national security chief Ali Larijani, Iran's de-facto leader, in a targeted airstrike in Tehran. The kill was confirmed by the Israeli Defence Minister, marking the most significant leadership strike of the entire conflict.
• Iran firesfresh missile salvo at Israel — Iran launched cluster missiles and fresh barrages hitting central Israel with multiple impact sites reported, injuring at least one person. Simultaneous drone and rocket attacks targeted the US Embassy in Baghdad, causing explosions and injuries to personnel.
• Iran escalates on Gulf & shipping — Iranian drones struck the UAE's Shah gas field (set ablaze) and the Fujairah Oil Industry Zone. Another tanker was hit near the Strait of Hormuz. Saudi Arabia intercepted over a dozen drones amid simultaneous attacks targeting Kuwait and Bahrain.
• Israeli and US strikes intensify — The Israeli Air Force conducted over 200 additional strikes on Iranian command centres, air defences, and infrastructure across western and central Iran in the past 24 hours. The US is deploying further military assets to the Middle East.

The Trump administration is using the current 20–30 day supply buffer window to assess a clearer long-term strategic direction. Until a definitive war or de-escalation plan emerges, crude prices will remain highly event-driven and volatile.

SPR / IEA

IEA member nations have agreed to a coordinated release of 400 mln bbl — the largest emergency SPR release since the IEA was founded after the 1973 Oil Crisis. The US, under the Trump administration, is contributing 172 mln bbl structured as loans to companies with repayment including a premium.

Deliveries are expected to begin reaching the market by the end of next week and will continue over approximately 120 days. The first batch of 86 mln bbl has already been opened for bidding. Japan will release 80 mln bbl beginning 16th Mar'26.

IEA Region-wise Release Breakdown — As of 15 Mar 2026

Key Supply Infrastructure

GCC Bypass Pipelines Running Near Capacity — But Shah Gas Field Ablaze and Fujairah Zone Struck

• Saudi Arabia's East–West Pipeline and the UAE's ADCOP are fully operational, providing combined bypass capacity of approximately 6.5–7.0 MBpd above pre-conflict export levels. Both lines are running at or near maximum utilisation as of mid-Mar 2026.
• Of approximately 15 MBpd of crude transiting the Strait of Hormuz in OND'25, combined SPR releases and bypass pipeline capacity can offset roughly two-thirds — or slightly more — for the next 20 to 30 days, providing the Trump administration a window to assess strategic direction.
• New strikes directly threaten this buffer — Iranian drones struck the UAE's Shah gas field (currently ablaze) and the Fujairah Oil Industry Zone on Mar 17. A tanker was also hit near the Strait of Hormuz. Saudi Arabia intercepted over a dozen drones; Kuwait and Bahrain sustained additional attacks. These represent the first direct strikes on GCC energy export infrastructure since the conflict began.

Supply & Demand Analysis

War Scenarios Point to Global Supply Deficit of 1.35–1.90 MBpd in 2026; AMJ Quarter Most Severe

Pre-war, global supply and demand were near-balanced with a modest surplus of +0.55 MBpd projected for 2026. Both conflict scenarios introduce significant supply deficits driven by Strait of Hormuz disruptions and impacts on Iraq and Kuwait crude production.

• Scenario 1 (Preferred): Exchange of attacks between US/Israel and Iran continuing, leading to severe/significant/complete disruptions of crude oil and its products trade through the Strait of Hormuz, severely impacting Iraq's and Kuwait's crude oil production over the next 3 to 6 months. Full-year 2026 deficit: −1.90 MBpd. AMJ quarter most acute at −4.50 MBpd.
• Scenario 2 (Alternate): Partial disruptions of crude oil trade through the Strait of Hormuz, with Iran not targeting ships and oil tankers moving toward China, India, and select Asian nations outside the Western alliance. Full-year 2026 deficit: −1.35 MBpd. Balance returns to flat by OND '26.

Economic Updates

• The US Dollar Index declined during the session, falling from 99.71 to 99.57, marking a 0.14% day-to-day decrease, though it remains around 0.75% higher on a weekly basis. The decline was largely driven by a risk-on shift in market sentiment, as US equities moved higher during the session, reducing short-term demand for the dollar.
• In addition, profit-taking after the recent rally in the greenback where DXY touched 10 month high, contributed to the pullback. Despite the short-term decline, the broader trend in the dollar has remained supported by greater clarity around the U.S. interest-rate outlook and heightened geopolitical tensions.

Price Outlook

Brent Expected to Trade 90–120 USD/bbl

Brent Crude 1M Futures are expected to trade in a range of 90 USD/bbl to 120 USD/bbl over the coming 1 to 2 weeks. The coordinated SPR release and GCC bypass capacity provide a meaningful supply cushion that limits sustained upside beyond these levels.