Countering the Middle East supply disruption crisis, U.S. crude oil inventories increased by 6.56 million barrels, far exceeding expectations.

Despite attacks on the UAE's energy infrastructure and continued escalation of geopolitical risk premiums, oil prices fell on Wednesday. The key factor offsetting geopolitical pressure was a much larger-than-expected increase in U.S. crude oil inventories. On March 18, Reuters cited data from the American Petroleum Institute (API), reporting that for the week ending March 13, U.S. crude oil inventories increased by 6.56 million barrels, far exceeding the 380,000-barrel increase expected by Reuters' survey. The strong impact of the inventory data caused a clear shift in market sentiment. At the time of writing, Brent crude fell 1.3% to $98 per barrel; WTI crude fell 2.6% to $93 per barrel. Meanwhile, Citibank warned that if a disruption in transportation in the Strait of Hormuz occurs over the next four to six weeks, global markets could lose 11 to 16 million barrels of oil per day, which may drive Brent crude prices up to around $110-$120 per barrel. —— The UAE Attack Incident Continues to Ferment The geopolitical risks causing recent oil price volatility continue to ferment, and the risk of supply disruption has not dissipated. UAE energy facilities have suffered consecutive attacks, including a drone strike against the world's largest ultra-acidic natural gas facility, a fire at the Fujairah oil industrial area, and damage to an oil tanker near the Strait of Hormuz. The Shah gas field remains shut down due to a fire caused by a drone strike. This gas field is jointly operated by Abu Dhabi National Oil Company and Occidental Petroleum and has a daily production capacity exceeding 1.28 billion standard cubic feet. Market focus is also on the U.S. military's precise strikes on Iranian missile positions along the coast of the Strait of Hormuz. According to Xinhua, the U.S. Central Command posted on social media on the 17th, stating that the U.S. military used multiple 5,000-pound bunker-buster bombs to strike Iranian missile positions along the Strait of Hormuz. Andy Lipow, president of Lipow Oil Associates, believes that although the U.S. military's use of bunker-buster bombs may intensify short-term volatility in the oil market, it could create conditions for restoring safe passage through the strait. —— Citi: In Extreme Scenarios, Oil Prices May Reach $200 CitiBank remains cautious in its assessment of the recent crude oil market, expecting short-term prices to remain under pressure. The bank's baseline scenario suggests that if shipping through the Strait of Hormuz is blocked for four to six weeks, 11 to 16 million barrels of crude oil supply could be interrupted daily, and Brent crude prices may be pushed to the $110-$120 range per barrel. In a more extreme risk scenario, if supply disruptions last longer or energy infrastructure suffers broader strikes, Citi expects Brent crude’s average price in the second and third quarters could rise to $130 per barrel, with peaks reaching $150. If disruptions to refined oil product supply are factored in, oil prices could even rise as high as $200. Risk Disclosure and Disclaimer The market involves risk, and investment requires caution. This article does not constitute personal investment advice and does not take into account the specific investment objectives, financial situation, or needs of individual users. Users should consider whether any opinions, viewpoints, or conclusions in this article suit their own particular situation. Invest accordingly at your own responsibility.