WTI crude oil touched $100.04 per barrel on March 28, crossing triple digits for the first time since July 2022. Brent closed at $112.57, up 4.22% on the day and 51.33% in a single month. The oil price is surging because the Strait of Hormuz, the narrow waterway carrying roughly 20% of global crude supply, is effectively shut.
This isn't a pipeline outage or a tanker seizure. This is 10 million barrels per day gone from global supply after U.S.-Israel joint air strikes on Iran triggered a full closure of the world's most critical oil chokepoint. The physical Dubai benchmark is trading at $126 per barrel, up 76% since February 27 according to CNBC. That Dubai premium tells you everything. The tightness is real, physical, and getting worse.
I've traded commodities for over two decades. I was on the NYMEX floor during the Iraq invasion, through the 2008 spike to $147, through COVID's negative prices. This is different. The scale of the supply disruption has no modern precedent.
The Hormuz Closure Is Bigger Than the 1970s Oil Shocks
The Strait of Hormuz previously handled 20 million barrels per day of oil flows. Those flows have dropped to near zero since the U.S.-Israel strikes began on February 28. Gulf producing nations have been forced to cut production by at least 10 million barrels daily because onshore storage is filling up and bypass pipeline capacity is limited. Rory Johnston, an oil markets researcher, put it bluntly: "A prolonged closure would be bigger than the oil shocks of the 1970s."
That comparison isn't hyperbole. The 1973 Arab embargo removed roughly 4.4 million barrels per day. The 1979 Iranian Revolution took out about 5.6 million. Iraq's invasion of Kuwait in 1990 disrupted around 4.3 million. The current Hormuz closure has already removed double those figures. And the IEA's March 2026 Oil Market Report estimates the global supply loss will reach 4.5 to 5 million barrels per day net (after accounting for non-Gulf production), expected to double by mid-April.
The IEA responded on March 11 with the largest coordinated strategic reserve release in history: 400 million barrels from emergency stockpiles across member countries. That buys time. It doesn't fix anything.
| Event | Year | Supply Disrupted (mb/d) | Brent Peak |
|---|---|---|---|
| Arab Oil Embargo | 1973 | ~4.4 | N/A (pre-Brent) |
| Iranian Revolution | 1979 | ~5.6 | ~$40 |
| Gulf War (Kuwait) | 1990 | ~4.3 | ~$46 |
| Libya Civil War | 2011 | ~1.5 | ~$127 |
| Russia-Ukraine War | 2022 | ~1.0 | ~$130 |
| Hormuz Closure | 2026 | ~10.0 | $112.57 (and climbing) |
Look. The table speaks for itself. Nothing comes close.
Why Oil Prices Aren't Even Higher
Here's the thing. Brent at $112 with 10 million barrels offline sounds almost cheap. Dan Pickering of Pickering Energy Partners explained the logic: "Why is it so high? Because this war is going to be over soon." Markets are pricing a resolution. They're betting on diplomacy.
That bet got a lot riskier on March 28. Iranian Foreign Minister Abbas Araghchi killed any hope of near-term talks: "No negotiations have happened with the enemy until now, and we do not plan on any negotiations." Iran then began operating a yuan-based toll system at the Strait, per OPB/NPR reporting. That's not the behaviour of a country preparing to stand down.
Rory Johnston described the current market as being in "the midst of this almost like 'Schrodinger's cat' of the largest oil supply shock." The market simultaneously prices the worst disruption in history and a resolution that hasn't materialised. Ellen Wald of the Atlantic Council confirmed the ongoing threat: "Drones are still flying; missiles are still flying across the strait."
I'm watching the backwardation structure closely. Front-month Brent is trading at a steep premium to contracts six months out. That tells you physical barrels are scarce right now. It rewards anyone holding actual crude and punishes anyone betting on a quick normalisation with longer-dated positions.
The volatility is staggering. We're seeing intraday swings of up to $35 in a single day. That's not a market for casual participants. If you're trading crude oil right now without tight risk management, tools like AO Shadow that automate position exits aren't optional. They're survival.
OPEC+ Response: Too Little, Stuck Behind a Closed Door
OPEC+ agreed on March 1 to raise output by 206,000 barrels per day starting in April, with Saudi Arabia pushing a broader collective increase of 640,000 b/d to bring total OPEC 12-member production to 29.52 million barrels daily. On paper, that's a response.
In practice, it's almost meaningless.
Most OPEC spare capacity sits in Saudi Arabia, the UAE, Kuwait, and Iraq. All of those countries export primarily through the Strait of Hormuz. You can pump all the oil you want. If you can't ship it, it stays in the ground or in tanks that are already filling up.
The bypass options are thin. Saudi Arabia has the East-West pipeline to the Red Sea with roughly 5 million barrels per day of capacity. The UAE has the Habshan-Fujairah pipeline at about 1.5 million. Together, that's maybe 6.5 million barrels of alternative routing against 20 million that used to flow through Hormuz. The maths doesn't work.
So OPEC+ can announce increases all day long. The market knows the barrels are stranded. That's why the Dubai physical price is at $126, well above the Brent futures price. Physical crude in the Gulf commands a premium because it can't get out.
What Traders Need to Watch Right Now
Forget the noise. There are four things that matter for oil prices over the next two to four weeks.
First, Iranian diplomatic signals. Araghchi's March 28 statement was a hard no. Any reversal, any back-channel hint of talks, will trigger an immediate selloff. I'm talking $20 to $30 off Brent within hours. That's your downside risk if you're long.
Second, U.S. naval movements in the Persian Gulf. If the U.S. Navy attempts to force open a shipping corridor through Hormuz, that changes the calculus entirely. It could either restore some flows or escalate the conflict. Either way, crude moves violently.
Third, the Dubai-Brent spread. Right now Dubai trades at a $13+ premium to Brent. That spread measures real physical tightness versus paper market pricing. If it widens further, the physical market is getting worse. If it narrows, flows are resuming somewhere.
Fourth, SPR draw rates. The IEA released 400 million barrels. At a net global supply loss of 4.5 to 5 million barrels per day, those reserves last roughly 80 to 90 days. We're already 17 days in. By mid-April, the cushion thins considerably.
The key levels on my screen: WTI $100 is now support after the March 28 breach. Brent $113 is immediate resistance. A weekly close above $113 Brent opens the path toward $130. On the downside, a credible ceasefire signal takes WTI back toward $85 fast.
Gasoline prices deserve mention. U.S. consumers are paying roughly $1 per gallon more already. Ed Crooks of Wood Mackenzie warns that the full effects have not yet hit. Retail gas lags crude by two to four weeks. April pump prices will be ugly.
My Positioning
I'm long Brent. Took an initial position at $94, added at $107. My stop is at $98 Brent, which gives me room for a diplomatic shock without getting stopped on noise.
I'm not chasing WTI above $100. The Brent-WTI spread should keep widening because the supply disruption is a Brent and Dubai story, not a Permian Basin story. U.S. shale production is unaffected by Hormuz. WTI will lag.
The trade I like most right now isn't outright crude. It's the crack spread. Refined product margins are about to blow out. Gasoline and diesel inventories were already below seasonal averages before the war started. Now crude inputs are constrained. Refiners with access to non-Gulf crude, particularly in the U.S. Gulf Coast, are printing money. Gold just crashed 9% on the Warsh shock and silver dropped 14% in a single session, but energy is where the real action sits.
If you're the kind of trader who follows results over predictions, the commodity space right now is as target-rich as it gets. The moves are massive. The risk is real. And the volatility isn't going away until someone picks up a phone and stops a war.
I've been at this for over 20 years. The Hormuz closure is the most significant supply event I've traded through. It beats 2008, beats COVID, beats everything. If you're sitting on the sidelines waiting for clarity, you'll be waiting a long time. The energy market is telling you something. The oil price at $100+ with 10 million barrels offline and no negotiations in sight isn't a head-fake. It's the new reality until proven otherwise. For traders managing positions across volatile markets like this, a community of 5,000+ traders sharing real-time setups makes the difference between reacting and anticipating. Start here if that's what you're after.
FAQ
Why did the oil price hit $100 in March 2026?
WTI crude oil hit $100.04 on March 28, 2026, because the Strait of Hormuz closure following U.S.-Israel strikes on Iran removed approximately 10 million barrels per day from global supply. Brent crude closed at $112.57. The disruption represents the largest single oil supply shock in modern history, surpassing the 1970s oil embargoes.
How much oil flows through the Strait of Hormuz?
The Strait of Hormuz previously carried approximately 20 million barrels per day, representing roughly 20% of global oil supply. Since the U.S.-Israel strikes on Iran beginning February 28, 2026, flows through the strait have dropped to near zero. Gulf nations cut production by at least 10 million barrels daily as onshore storage filled up.
Will OPEC increase production to lower the oil price?
OPEC+ agreed to increase output by 206,000 barrels per day starting April 2026, with Saudi Arabia pushing total production to 29.52 million barrels daily. But most OPEC spare capacity sits behind the closed Strait of Hormuz, so the extra barrels are effectively stranded. Bypass pipelines handle only about 6.5 million barrels daily.
What happens to the oil price if the Strait of Hormuz reopens?
A credible ceasefire signal or Hormuz reopening would likely trigger a $20 to $30 per barrel collapse in Brent crude within hours. Dan Pickering of Pickering Energy Partners noted current prices partly reflect expectations the conflict ends soon. Iran's March 28 refusal to negotiate removed that near-term hope, keeping prices elevated.
