Crude futures turn positive as Strait of Hormuz remains closed by war

Crude futures turned positive on March 13, 2026, as the Strait of Hormuz remained effectively closed due to the U.S.-Iran conflict, despite persistent risks of prolonged supply disruptions. The strait, through which approximately 20% of global oil and a significant share of liquefied natural gas (LNG) flows, has seen tankers anchor outside the region amid heightened security threats, including drone and missile attacks. The International Energy Agency (IEA) announced plans to release 400 million barrels of oil from reserves, its largest intervention in history, to mitigate the shock. Brent crude prices surged to $119 per barrel earlier in the week, though they retreated slightly by close-of-market, reflecting uncertainty over the duration of the crisis.

The closure has triggered cascading effects across energy and commodity markets. Asian economies, heavily reliant on Middle Eastern oil and LNG, face acute supply constraints, with China halting fuel exports and South Korea imposing fuel price caps. Beyond oil, sectors such as aluminum, fertilizers, and petrochemicals are under pressure. Aluminum prices rose as Gulf exports of raw materials dwindled, while fertilizer costs spiked due to disrupted nitrogen shipments, threatening agricultural inputs during critical planting seasons. Shipping rerouting and insurance premium hikes further compounded costs, with analysts warning of inflationary pressures and reduced manufacturing capacity.

While the U.S. and allies consider naval escorts to stabilize shipping, experts caution that even partial reopening may take weeks, prolonging volatility. The crisis underscores the strait's role as a global economic lifeline, with prolonged disruption risking broader inflation, currency pressures, and growth headwinds for import-dependent markets. For now, crude futures remain anchored to geopolitical developments, with markets balancing short-term scarcity against long-term demand concerns.