According to a research report from Guotai Haitong, international oil prices have shown strong performance since March 2026. As of March 18, 2026, Brent crude closed at $107.38 per barrel, marking an increase of 38.13% compared to early March. This surge is primarily driven by military strikes launched by the United States and Israel against Iran, which prompted Iran to blockade the Strait of Hormuz and attack U.S. military bases, causing significant turbulence in global energy and chemical markets. In response to the shock, OPEC+ initiated another modest production increase starting in April 2026, although it remains insufficient to offset the supply gap. Key viewpoints from Guotai Haitong are as follows:
Iran's blockade of the Strait of Hormuz led to a sharp rise in oil prices in March. Since the beginning of March 2026, international oil prices have strengthened considerably. By March 18, 2026, Brent crude settled at $107.38 per barrel, up 38.13% from early March. The main bullish factor stems from geopolitical developments, including military actions by the U.S. and Israel against Iran. Iran's subsequent closure of the Strait of Hormuz and attacks on U.S. bases triggered severe fluctuations in global energy and chemical markets, pushing prices of crude oil and related products significantly higher.
OPEC+ resumed a small-scale production increase in April 2026. On March 1, 2026, eight major OPEC+ oil-producing nations, including Saudi Arabia and Russia, held a video conference. Given the relatively stable global economic outlook and current low inventory levels, the countries decided to implement a production adjustment increasing output by 206,000 barrels per day starting in April 2026. This increase by the eight OPEC+ nations exceeded the market's general expectation of 137,000 barrels per day.
Non-OPEC+ countries are projected to contribute approximately 600,000 to 1 million barrels per day of supply growth annually from 2026 to 2027. During this period, non-OPEC+ nations in the Americas, led by the United States, Brazil, and Canada, will continue to provide incremental crude oil supplies. According to OPEC+ monthly reports, non-OPEC+ crude oil production is expected to grow by 630,000 barrels per day in 2026 and 610,000 barrels per day in 2027. Specifically, Canada's increases for 2026 and 2027 are projected at 110,000 and 130,000 barrels per day, respectively; Brazil's increments are estimated at 160,000 and 140,000 barrels per day; and Argentina's contributions are forecast at 60,000 and 90,000 barrels per day.
Crude oil demand projections for 2026 have been revised downward compared to the previous month. Based on average estimates from OPEC+, the EIA, and the IEA, global crude oil demand is expected to grow by 1.073 million barrels per day in 2026 and 1.32 million barrels per day in 2027. OPEC+ anticipates demand growth of 1.38 million and 1.34 million barrels per day for 2026 and 2027, respectively; the EIA forecasts increases of 1.2 million and 1.3 million barrels per day; while the IEA projects a rise of 640,000 barrels per day for 2026.
Global crude oil inventories remain at near five-year lows. Since the second half of 2020, driven by improving demand and OPEC+ production cuts, the global crude oil market has entered a destocking phase. Current inventory levels are still near their lowest in five years. Additionally, the United States plans to replenish its strategic reserves. Prior to the Russia-Ukraine conflict, U.S. strategic petroleum reserves stood at approximately 580 million barrels. Since then, strategic reserves have been gradually released to stabilize oil prices. As of March 18, 2026, U.S. strategic crude oil reserves were around 415 million barrels. Although there has been a general replenishment trend since August 2023, reserves remain at historically low levels not seen since 1984.
Risks include significant fluctuations in crude oil prices and potential shortfalls in policy effectiveness.
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