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

• A fire on a fully loaded Kuwaiti oil tanker hit by an Iranian attack at Dubai Port was extinguished, raising concerns about a possible oil spill. The tanker was loaded with 2 mln bbl of crude oil from Kuwait and Saudi Arabia, with a destination of Qingdao, China.
• Crude oil production resumed at Libya's Sharara and El Feel oilfields after completing maintenance on a crude export pipeline. The fields had been shut down due to pipeline damage and a suspension in operations.
• Sharara is one of Libya's largest production areas, with a capacity of between 0.30and 0.32 MBpd.
• The risk of an expanded Iran war grew on Saturday as Yemen's Iran-aligned Houthis launched their first attacks on Israel since the start of the conflict, even as additional ​US forces reached the Middle East.
• Saudi Arabia's East-West pipeline is pumping oil at its full capacity of 7 MBpd, bypassing the Strait of Hormuz. Crude oil exports from Yanbu port have reached 5 MBpd, and the country is also exporting 0.70 to 0.90 MBpd of oil products.
• Russian Deputy Prime Minister instructed the energy ministry to draft a resolution banning gasoline exports from 01st Apr'26. The ban will remain in place until 31st Jul'26 due to global oil market turmoil caused by the Middle East crisis.
• Russia has imposed export curbs on gasoline and diesel to control rising fuel prices and tackle shortages. Last year, Russia exported nearly 0.12 MBpd of gasoline.
• The US President Trump extended a pause on attacks against Iran’s energy infrastructure until 06th Apr'26, amid ongoing but disputed talks, as the prolonged conflict continues to strain global markets and raise inflation concerns.

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 is pumping oil at its full capacity of 7 MBpd, bypassing the Strait of Hormuz. Crude oil exports from Yanbu port have reached 5 MBpd, and the country is also exporting 0.70 to 0.90 MBpd of oil products.
• 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 yesterday's session, rising from 100.15 to 100.50 level, trading near a 10-month high. The index recorded a daily gain of 0.36% and advanced 1.58% on a weekly basis.
• The upward move was primarily supported by safe-haven demand amid escalating geopolitical tensions in the Middle East, particularly the ongoing Iran–Israel conflict, which weighed on global risk sentiment and drove capital flows toward the dollar.
• On the US front, US weekly jobless claims show a stable labor market with limited layoffs, despite macro risks from Middle East tensions and trade uncertainty. Initial claims rose modestly by 5K to 210K, in line with expectations, while continuing claims fell 32K to 1.819M, the lowest in nearly two years, indicating steady absorption of unemployed workers.
• The labor market remains in a “low-hire, low-fire” phase, though rising oil prices, tariff uncertainty, and tightening labor supply are starting to weigh on job growth, keeping the Fed cautious and supportive of a wait-and-watch approach amid inflation risks.

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.