Monday’s commodity trading is characterized by immense volatility. Investors are anxiously awaiting the expiration of the ultimatum issued by President Donald Trump to Tehran. A potential clash looms on the horizon, threatening to drive oil prices to levels not seen since the historic 2008 crisis.
The situation in the Persian Gulf has reached a boiling point. After US-Israel strikes in late February provoked Iran into effectively closing the Strait of Hormuz, the global economy began feeling the paralysis of one of the world’s most critical trade routes. Approximately 20% of global oil supplies typically pass through this narrow waterway.
Diplomacy in the Crosshairs: An Energy Checkmate
Last Saturday, Donald Trump threatened to „obliterate” Iranian power plants if Tehran failed to reopen the Strait within 48 hours. This deadline expires Monday, Washington time. Iran’s response was immediate and equally fierce:
„If our electrical grid is struck, energy and water facilities throughout the region will be considered legitimate targets for us,” announced Mohammad Baqer Qalibaf, speaker of the Iranian parliament.
This escalation fuels fears of permanent destruction of critical infrastructure across the Gulf, which could knock out resource supplies for months.
Market Reaction: Goldman Sachs Revises Forecasts
Uncertainty immediately hit the charts. Although the session began with losses, prices quickly rebounded:
- Brent Crude rose 1% to $113.32 per barrel.
- WTI Crude gained nearly 2.8%, breaking the $101 mark.
Goldman Sachs analysts offer no illusions—this is just the beginning. The bank sharply raised its forecasts, predicting Brent to average $110 in March and April (up from $98). Experts warn: if flows through Hormuz remain at just 5% of normal levels for the next 10 weeks, Brent prices could surpass the historic record of $147 set in July 2008.
The Greatest Crisis Since the 1970s?
Fatih Birol, Executive Director of the International Energy Agency (IEA), described the situation as „very severe.” According to him, the current Middle East crisis, combined with the lingering effects of the Russia-Ukraine war, has more destructive potential than the oil shocks of the 1970s.
In response, IEA member nations agreed on March 11 to release a record 400 million barrels of oil from strategic stockpiles. Birol remains in consultation with governments in Europe and Asia regarding further interventions, though he stresses that the only real solution is the full reopening of the Strait of Hormuz.
The Widening Brent-WTI Spread
An interesting phenomenon is the growing price gap between the two major benchmarks. The spread between Brent and American WTI exceeded $14 on Monday—the highest level in years. As Amrita Sen from Market Intelligence notes, the United States remains the most shielded region. As the world’s largest oil producer with massive strategic reserves, the US has a „cushion” that Europe and Asia—directly dependent on Middle Eastern sea routes—lack.
Investors are now fixated on the clock in Washington. The coming hours will determine whether the market faces a temporary turbulence or a prolonged energy crisis that stifles global economic growth.
