"For oil prices, aside from the reopening of the strait, 'everything else is unimportant.'"

At present, Hormuz has become the only variable closely watched by investors, and the market is now pricing in more than one month of disruption.

According to Windchaser Trading Desk, Deutsche Bank's commodities research analyst Michael Hsueh published the latest report on March 9, 2026. The core conclusion is straightforward and unequivocal: when the Strait of Hormuz can safely reopen is the only decisive variable for current oil price trends.

Whether it is Strategic Petroleum Reserve (SPR) releases, Russian crude oil exemptions, or policy tools such as price caps, none can fundamentally reverse the trend of oil prices until the issue of reopening the strait is clarified.

Currently, oil prices have broken through $100/barrel. According to the Deutsche Bank model, this means the market is pricing in more than one month of Strait interruption. If oil prices rise to the $105-$115/barrel range, this corresponds to the market pricing in about two months of disruption. If prices escalate further to $130-$150/barrel, it means the market expects up to three months of closure. The most critical trading logic right now is only one: closely monitor the timing and safety conditions for the reopening of the strait.

Oil prices have exceeded one-month interruption pricing, still have upside potential

The report points out that oil prices breaking through $100/barrel have exceeded the previous "$80-$100/barrel fuzzy shutdown" pricing scenario, indicating the market has extended the expected interruption duration from one month to a longer cycle. $105-$115/barrel corresponds to about two months of disruption, and $130-$150/barrel corresponds to a three-month closure scenario.

In a downside scenario, if military escort of commercial fleets can be launched around March 18, allowing commercial traffic to first recover at 50% speed, then reach 100% by early April, the actual interruption duration will be close to one month.

Under this assumption, Brent crude prices are expected to fall back to around $90/barrel, depending on the market's assessment of the ongoing risk of attacks on tankers.

Trump reiterates oil prices will not constrain military decisions; India’s Russian oil exemption is negligible

An important observation in the report is that the U.S. decision-makers do not seem to have any threshold for constraining military action due to high oil prices. According to Xinhua, regarding rising international oil prices, U.S. President Trump said on social media on March 8 that for the "security and peace of America and the world," this is only a "very small price."

Additionally, although U.S. Treasury Secretary Besent claimed they are studying policy measures to stabilize oil prices, the only substantive measure implemented so far is granting exemptions to Indian refiners, allowing them to receive Russian oil cargoes already en route.

According to estimates, this exemption will raise India's March imports from Russia to 33 million barrels, averaging about 1.1 million barrels per day, an increase of about 500,000 barrels per day compared to January’s estimate of 600,000 barrels per day.

However, the report clearly points out that this increase "would be significant at any other time," but given the current loss of global supply of 17-20 million barrels per day due to the Hormuz Strait interruption, its impact is almost negligible. Notably, March’s import speed may still be lower than last December’s level recorded by India’s Ministry of Commerce and Industry.

SPR releases: a psychological balm, not a fundamental solution

The report gives a cautious assessment of the effectiveness of SPR releases. Treasury Secretary Besent said further measures to stabilize the market will be continually announced, and the G7 is reportedly discussing coordinated releases of emergency oil reserves.

However, Deutsche Bank analysis points out three fundamental limitations of SPR releases:

First, limited reserves. Once released on a large scale, it may trigger greater market panic over supply depletion.

Second, supply lag. According to the Japanese government, SPR releases typically require about one month (including auction procedures); The U.S. Department of Energy states deliveries can start 13 days after announcement at the earliest, but the actual timeline depends on logistics.

Third, the release rate is seriously insufficient. At its peak in 2022, U.S. SPR releases reached about 1 million barrels per day. Even if the U.S. increases to 1.5 million barrels per day, plus another 1.5 million barrels per day from other IEA member countries, the total is only 3 million barrels per day—far below the daily supply gap of 17-20 million barrels caused by the Hormuz interruption.

Therefore, the report believes that if SPR releases are not accompanied by a clear prospect of reopening the strait, at most, it is a short-term psychological comfort, not a substantive supply-demand solution.

Furthermore, the report emphasizes the technical difficulty of reopening the strait. Military naval analysts previously judged that the U.S. military would provide escort for commercial fleets no earlier than 10-14 days after last week’s mid-point. This means the earliest optimistic window for reopening the strait may be mid to late March.

The report finally proposes a potential supply recovery accelerator: if the Hormuz Strait reopens, OPEC member countries with spare production capacity, such as Saudi Arabia, UAE, and Kuwait, may temporarily increase output to compensate for previous supply gaps. Deutsche Bank believes this move aligns with these countries’ interests—preventing prolonged demand damage from high oil prices and gaining short-term income—but there is currently no expression or signal from any OPEC country.

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The above highlights are from Windchaser Trading Desk.

For more detailed interpretation, including real-time commentary and frontline research, please join [Windchaser Trading Desk ▪ Annual Membership]

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