Impact Assessment of US/Israel-Iran Conflict

Important Update

Nayara Energy Refinery Maintenance Update:

• Based on multiple sources, Nayara Energy is planning to go for a maintenance for a period of around 35 days from early Apr’26. Already, earlier in Dec’25, Nayara Energy postponed it’s refinery maintenance due to some vendor related constraints related to Catalysts (because of EU Sanctions related to Russian Crude oil buying). To ensure the safety & efficiency of Refinery, Nayara is planning to go for this maintenance from early Apr’26.
• Nayara has a Refinery capacity of 20 million tons per Annum and PP Production capacity of 450 thousand tons per Annum. Despite possible buffer stocks of Petroleum Products & PP Resin availability during the maintenance, amid ongoing crisis of LPG & Polymers Shortage in domestic market, this plant maintenance during Apr’26 is going to further tighten LPG & PP Resin supplies in the domestic market providing support to PP Resin prices.
• Multiple PP production plants in India got affected over the last 3 months, RIL Jamnagar. Amid current government restrictions over diversion of Propane to LPG rather than for PP production, more plants like MRPL, GAIL, RIL, OPaL production are also expected to get impacted.

Market / War Update

• At least 40% of Russia's oil export capacity has halted due to Ukrainian drone attacks, a disputed attack on a major pipeline, and the seizure of tankers. This is the most severe oil supply disruption in modern Russian history, hitting Moscow as oil prices exceed 100 USD/bbl.
• Russia's major oil export terminals Primorsk and Ust-Luga suspended crude oil and oil products loadings on 25th Mar'26 after Ukrainian drone attacks sparked fires, with smoke visible from Finland.
• The drone attacks are likely to add to uncertainty on global oil markets. Ukraine has stepped up drone attacks on Russian oil refineries and export routes in an attempt to weaken Russia's war economy and as peace talks have stalled.

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 edged higher in the session, rising from 98.95 to 99.434 level, marking a 0.5% day on day basis rise, while remaining down by 0.1% on a weekly basis. The downside was primarily driven by a pullback in US.
• Treasury yields, as market sentiment improved following indications from Donald Trump that the US would avoid targeting key infrastructure in Iran, easing near-term geopolitical risk and reducing safe-haven demand for the dollar.
• Additionally, strength in the Euro further pressured the index, given its heavy weight in the DXY basket, amplifying the overall downside move.
• The Federal Reserve decided to maintain the federal funds rate unchanged at 3.50%-3.75%, emphasizing its commitment to maximum employment and returning inflation to the 2% target. While uncertainty around the economic outlook remains elevated, particularly due to developments in West Asia, the Fed slightly revised up its GDP growth projections, kept unemployment broadly unchanged, and raised inflation projections for 2026–2027, signaling a more persistent inflation outlook.

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.