Hormuz Shut, $103 Oil, and Washington Down to Its Last Option
Brent crude surged 2.7% to $103.14 per barrel and WTI jumped 3.1% to $98.71 per barrel [AP News as of 13 March 2026 20:52 UTC], with Brent now up approximately 40% and WTI up approximately 46% for the month. Over 12 million barrels per day have been taken offline as producers halt output due to the loss of shipping capacity through the closed Strait of Hormuz, per [AP News as of 13 March 2026 20:52 UTC], while Saudi Arabia specifically cut production by 2 million barrels per day following the shutdown of its Safaniya and Zuluf offshore fields — with rerouting through its East-West pipeline unable to fully compensate, per [OilPrice.com as of 13 March 2026 15:38 UTC]. The IEA has characterised this as the largest oil supply disruption in the history of the global market, projecting a global supply plunge of 8 million barrels per day, per [Fortune as of 13 March 2026 17:18 UTC].
A CNBC analysis published 13 March explicitly states that "there isn't much the U.S. or any other government can do to provide relief from higher oil prices short of ending the conflict," with combined strategic reserve releases estimated to offset less than half of the daily supply shortfall — leaving a net deficit of approximately 5 million barrels per day, per [CNBC as of 13 March 2026 17:01 UTC]. Trump separately stated the U.S. could escort ships through the Strait, though the U.S. Navy is currently unprepared to do so and is not expected to be capable until month-end, per [CNBC as of 13 March 2026 19:56 UTC]. Trump also stated the U.S. will strike Iran "very hard" over the next week, per [Yahoo Finance as of 13 March 2026 19:05 UTC].
Asian nations — which received more than 80% of pre-war Strait of Hormuz oil flows, with nearly 70% going to India, Japan, China, and South Korea — are now calling for belt-tightening as supply chains fracture and businesses invoke force majeure clauses, per [Christian Science Monitor as of 13 March 2026 20:18 UTC]. U.S. gasoline prices have risen nearly 20% since the war began, with GasBuddy forecasting a further 20–50 cents per gallon increase for gasoline and up to 75 cents per gallon for diesel, per [Fox 17 as of 13 March 2026 21:16 UTC]. Alaska's Department of Revenue has revised its oil price forecast sharply upward from $65 to $91 per barrel for the remaining fiscal year, projecting hundreds of millions in new state revenue, per [Anchorage Daily News as of 13 March 2026 22:21 UTC].
The latest price prints — Brent at $103.14 and WTI at $98.71 — confirm that neither the record IEA 400-million-barrel reserve release nor the Russian sanctions waiver has broken the rally, which is now entering its second consecutive week above $100. CNBC's explicit conclusion that military resolution is the only remaining lever marks a decisive shift in the policy narrative: it effectively closes off the administrative toolkit that markets had still been pricing as a potential source of relief. Critically, Saudi Arabia — the market's traditional swing producer and primary spare capacity holder — is now cutting output rather than adding it, raising the structural supply floor materially.
The forward risk picture has widened on multiple fronts. Iranian officials and IRGC leadership have warned oil could reach $200 per barrel if the regional conflict broadens — a figure cited independently by Wood McKenzie analysts as well. Kharg Island, which handles 90–95% of Iran's oil exports, is drawing growing attention in Washington as a potential military target; any strike on its infrastructure would represent an additional supply shock layered directly on top of the Hormuz closure already in place. With the U.S. Navy not yet capable of escorting tankers through the Strait and an Iranian supreme leader signalling the strait should remain closed, the supply gap has no confirmed near-term fix — administrative or military.