Middle East War Is Causing Largest Oil Supply Disruption in History, IEA Says -- Commodities Roundup

MARKET MOVEMENTS:

--Brent crude oil is up 9.9% at $101.20 a barrel.

--European benchmark gas is up 2.9% at 51.51 euros a megawatt hour.

--Gold futures are down 0.9% at $5,131.50 a troy ounce.

--LME three-month copper futures are down 0.6% at $12,963.50 a metric ton.

TOP STORY:

Middle East War Is Causing Largest Oil Supply Disruption in History, IEA Says

The International Energy Agency slashed its forecast for oil supply growth a day after a historic emergency stock release, as the Middle East war chokes flows through one of the world's most critical oil-transit routes.

The Paris-based organization, a group of Western nations and their allies, now expects supply to grow by 1.1 million barrels a day this year-a dramatic cut from the 2.4 million barrels a day expected previously. All supply growth is expected to come from outside the OPEC+ alliance as the conflict forces major Gulf producers to curb output.

In March, supply is projected to plunge by 8 million barrels a day to 98.8 million barrels a day, the lowest levels since the first quarter of 2022.

"The war in the Middle East is creating the largest supply disruption in the history of the global oil market," the IEA said in its closely watched monthly report on Thursday.

OTHER STORIES:

Escalating Hormuz Crisis Raises Specter of Prolonged Closure

Escalating Iranian attacks and the U.S. government's decision to hold off on military escorts for oil tankers through the Strait of Hormuz are raising the prospect of a prolonged closure that would choke off exports through the world's most important energy-transport route.

On Wednesday, the Islamic Revolutionary Guard Corps struck three cargo ships attempting to transit the waterway, the only sea route out of the Persian Gulf. It warned that any other vessels trying to move through the strait also would be targeted.

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Elon Musk's Tesla Obtains License to Supply Electricity in Britain

Tesla secured a license to supply electricity to households and businesses in Britain, a boost for Elon Musk's company as it seeks to expand its energy business.

Britain's energy regulator, the Office of Gas and Electricity Markets known as Ofgem, said Tesla Energy Ventures had received the go-ahead to provide electricity to domestic and nondomestic consumers in England, Scotland and Wales, but not Northern Ireland.

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RWE Plans $20 Billion Expansion in U.S. to Meet Data Center Demand

Germany's RWE plans to invest around $20 billion in renewable energy and gas-fired power plants in the U.S. as it seeks to cash in on growing energy demand from data centers.

The energy company said Thursday that it would spend around 17 billion euros ($19.66 billion) over the next five years on U.S. power assets. These include gas-fired power plants, onshore wind farms, solar power plants and battery-storage facilities.

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Norsk Hydro's Qatar Aluminum Plant Won't Shut Down Fully as Partner Renews Gas Flow

Norsk Hydro said its Qatari aluminum smelter would continue production at a reduced level rather than fully shutting down, as had been planned last week after gas supply was disrupted by Iranian attacks.

The Norwegian company's Qatalum plant, an equally owned joint venture with a subsidiary of state-controlled QatarEnergy, will maintain aluminum output at around 60% of total capacity, Norsk Hydro said in a release Thursday. Last week, Norsk said Qatalum would be fully shut down after QatarEnergy halted its output of liquefied natural gas, vital to industrial extraction of the much-used metal, following attacks on its energy facilities.

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President Trump's Head-Spinning Pivot on an Emergency Oil Release

In a rapid reversal that left U.S. allies stunned, the Trump administration shifted from opposing the largest-ever intervention in oil markets to cajoling allies into moving forward with the maneuver in a matter of hours.

Tensions in the global oil market seemed to be easing on Tuesday just as Western governments and their allies were debating a major release of emergency oil reserves to calm prices. President Trump said the war with Iran would be over soon, and some European nations were questioning whether governments should intervene at all, U.S. and European officials familiar with the discussion said.

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Energy Crisis Gives a Crew of Farming Microbes a Shot at Redemption

An energy crisis spells opportunity. Chris Abbott is hoping this one doesn't pan out like the last one.

Abbott is chief executive of Pivot Bio, a company that sells plant-nourishing microbes, and war in Iran has created an opening.

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Ecolab Imposes 10% to 14% Energy Surcharge as Middle East Conflict Pushes Up Energy Prices

Ecolab is imposing a 10% to 14% energy surcharge on all of its products and services to help offset surging energy prices stemming from the conflict in the Middle East.

The water and hygiene services company on Thursday said that soaring energy prices are contributing to major cost increases for raw materials, manufacturing and logistics throughout its supply chain.

MARKET TALKS:

Fertilizer Prices Climb on Middle East Disruptions, Supporting Nutrien -- Market Talk

1115 ET - Demand for Nutrien's fertilizers are likely to increase due to the war in Iran, which is disrupting shipping routes and limiting exports from major producers. Nutrien climbs 6.6%, in step with other global fertilizer providers. The company produces potash, nitrogen and phosphate fertilizers. Since a large portion of fertilizers come through the Strait of Hormuz, the company is particularly leveraged to rising nitrogen and potash prices where any prolonged disruption could further strengthen its pricing power heading into the spring application season. While higher energy costs remain a risk, the supply shock could put more demand pressure on producers outside the conflict zone. ([e-mail])

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IEA Oil Reserves Release Faces Limits on Timing, Product Mix -- Market Talk

1501 GMT - The IEA's announced 400 million-barrel emergency stock release covers about six weeks of typical Strait of Hormuz shipments, though its actual impact will depend heavily on timing and delivery logistics, Homayoun Falakshahi from Kpler says. The global market is currently losing roughly 12.5 million barrels a day of supply, a deficit that could narrow to around 9 million barrels a day as Saudi Arabia boosts shipments via Yanbu. If the full 400 million barrels are released within a month, they could offset between 32 and 45 days of disrupted supply, according to the analyst. Another limitation is inventory composition: IEA emergency stocks include both crude oil and refined products. "The headline 400 mbbls figure should not be interpreted as 400 mbbls of refinery-ready crude entering the seaborne market," Falakshahi says. ([e-mail])

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Gulf Refiners Might Be Forced to Curtail Runs Due to Hormuz Blockade -- Market Talk

1421 GMT - Refiners in the Gulf might soon have to slow the amount of crude they process and direct output solely to domestic markets as supplies become increasingly stranded, says Pankaj Srivastava from Rystad Energy. "Three key factors will determine the resilience of refining systems across the Gulf: bypassing the strait through alternate export routes, the balance of domestic product demand and refining capacity and product exports as a ratio of current refinery runs," the senior VP of commodity markets says. "Production shut-ins and refining cuts will likely continue across the region as the war rages on, severely threatening 2 million barrels per day of global oil supply if the strait remains impassable for the next six weeks." ([e-mail])

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Brent Just Below $100 As Gulf Attacks Escalate

1411 GMT - Brent crude hovers just below $100 a barrel as the Middle East conflict escalates, with intensifying attacks on vessels in the Gulf and growing doubts that emergency stock releases could offset the supply hit. The international oil benchmark is up 8.3% to $99.63 a barrel, while WTI rises 7.3% to $89.57. Iran's new Supreme Leader, Mojtaba Khamenei, vowed to continue closing the Strait of Hormuz and attack U.S. bases in the Middle East. Meanwhile, President Trump said in a Truth Social post that the U.S. benefits when oil prices rise and that stopping Iran remains a higher priority. "Near $100/bbl Brent is still under-cooked," says Neil Crosby from Sparta Commodities. "SPR release sounded big but spaced over several months, it won't come anywhere near to solving things."([e-mail])

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U.S. Natural Gas Edges Up Ahead of Storage Data

1020 ET - U.S. natural gas futures are modestly higher ahead of a weekly inventory report that is likely to show a smaller-than-usual withdrawal, narrowing the storage deficit to the five-year average. "A possible third-straight bullish EIA print today may pose further short-term upside," Eli Rubin of EBW Analytics says in a note. "Daily LNG feedgas is ticking higher and ultra-weak Permian pricing is likely to spur curtailments, offering further bullish fodder." The EIA is scheduled to release storage data at 10:30 a.m. ET. Nymex natural gas is up 0.8% at $3.234/mmBtu. ([e-mail])

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Oil Price Forecasts Raised by Citi as War in Iran Continues -- Market Talk

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03-12-26 1152ET