Oil Edges Higher, Brent Futures Eye Record Monthly Increase


   
Karim Bastati
DTN Analyst

   VIENNA (DTN) -- Oil prices edged higher in a choppy trading session Tuesday 
(3/31) morning as market participants were weighing talks of deescalation 
against the reality of ongoing military operations in the U.S.-Israeli war on 
Iran that has led to the most significant oil supply crisis in history and put 
Brent futures on track for the single largest monthly rise on record.

   Oil futures prices soared early Tuesday on reports of an Iranian drone 
strike on a Kuwaiti oil tanker in the Persian Gulf. The fully laden VLCC, 
carrying 2 million bbl of crude oil, was at anchor when it was set ablaze by 
the attack. Prices took a brief nosedive just hours later after the Wall Street 
Journal reported that U.S. President Donald Trump told aides he was willing to 
end the war against Iran even if the Strait of Hormuz remains largely closed 
for tanker traffic.

   This stood in stark contrast to the President's remarks from Monday, when he 
threatened to "blow up and completely obliterate" Iran's energy infrastructure 
if a deal is not reached shortly and the Hormuz Strait not "opened for 
business" soon. On Monday, the Iranian parliament passed a bill to impose fees 
for passage through the Strait of Hormuz. Officials in Tehran have repeatedly 
denied claims of direct negotiations, showing little interest in a temporary 
truce. The Israeli military, meanwhile, continued to carry out strikes across 
Iran, saying they were prepared to continue operations for several more weeks.

   Soaring energy prices are jeopardizing economic momentum and fragile oil 
demand growth already expected to be lackluster before the recent spike in 
prices. Front-month Brent future prices rose 59% in March, marking the largest 
increase in a single month in the contract's history. Front-month WTI futures 
rose 56% this month, the most since May 2020 when they rebounded from negative 
territory. Fuel prices have soared globally, especially in regions highly 
dependent on crude and refined product flows from the Middle East. Spot prices 
for jet fuel have climbed to their highest on record in some Asian markets.

   These additional inflationary pressures are also complicating monetary 
stimulus by central banks. Federal Reserve Chairman Jerome Powelll said on 
Monday (3/30) the central bank was ready to keep interest rates unchanged for 
now until the full effects of the supply crisis became evident. The CME Group's 
FedWatch Tool last month assigned a 25% probability for a rate cut at the Fed's 
April 29 meeting, and a 75% probability that rates will stay in the current 
350-375 basis point target range. Chances of a rate cut have now slipped to 
zero, with some investors even expecting a rate hike despite Powell's remarks.

   Near 07:40am ET, WTI for May delivery was up $0.71 to trade near $103.59 
bbl, and Brent for May delivery rose $3.76 to $116.54 bbl.

   ULSD futures for May delivery edged up $0.0037 to $4.2094 gallon, and RBOB 
futures for May rose $0.0038 to $3.2636 gallon.

   The US dollar index softened by 0.1 points to 100.25 against a basket of 
foreign currencies.




(c) Copyright 2026 DTN, LLC. All rights reserved.