Middle East Supply Risk
The Pentagon is preparing to deploy about 3,000 troops from the 82nd Airborne Division to the Middle East, on top of 50,000 already there, the Wall Street Journal reported. The market focus remains on supply disruption at the Strait of Hormuz. The IEA said the closure is the largest supply disruption in global oil market history, with flows falling from about 20 million barrels per day to a trickle. On 11 March, IEA members agreed to release 400 million barrels from strategic reserves. Goldman Sachs lifted WTI forecasts to $98 for March and $105 for April, and flagged a scenario where Hormuz flows stay at 5% of normal until 10 April. Traders are watching possible talks as early as Thursday and the 28 March end of the five-day postponement. On a 5-minute chart, WTI was $90.87, with resistance near $91.02, support around $90.50, and levels at $91.60, $92.20, $90.10, and $89.60. On the daily chart, WTI was $90.88, with support near $88.00, the 50-day EMA at $75.65, the 200-day EMA at $66.60, and resistance at $95.00 and $99.00.Market Lessons From March 2025
We remember the extreme whiplash in oil prices back in March 2025 when the Strait of Hormuz situation escalated. The market taught us a brutal lesson about how quickly geopolitical headlines can overwhelm fundamentals, with prices crashing 11% one day and recovering the next. That V-shaped recovery from below $90 a barrel showed how resilient the market was to buying on dips during a major supply crisis. Today, in late March 2026, the environment is far less chaotic, but we shouldn’t get complacent. WTI crude is currently trading around a more stable $82 a barrel, finding solid support after OPEC+ agreed earlier this month to extend its voluntary production cuts through the end of the second quarter. This move has effectively put a floor under the market, preventing a repeat of the slides we saw during periods of diplomatic optimism last year. The supply and demand picture is finely balanced, unlike the severe disruption of 2025. The U.S. Energy Information Administration (EIA) recently noted that while global demand remains robust, record production from the United States, Guyana, and Brazil is helping to meet that need. This steady non-OPEC supply is the main reason prices are not re-testing the highs we saw during the Hormuz closure. Given this stability, implied volatility in the options market is significantly lower than the panic levels of last year. This makes buying protection or placing directional bets with options relatively cheap. We should be looking at strategies like long call spreads to position for a potential grind higher into the summer driving season, without over-exposing ourselves to downside risk if economic data weakens. The technical picture supports a cautiously bullish stance, as price holds above its 50-day moving average near $79.50. A key area of resistance to watch is the $85 level, a psychological barrier that has capped rallies multiple times this year. A convincing break and hold above that price would signal that buyers are back in control and could open a path toward $90 later this quarter. We must also factor in the broader economic climate, as February’s Consumer Price Index came in slightly above expectations at 2.9%. This persistent inflation makes it less likely the Federal Reserve will cut interest rates in the near term, which could act as a headwind for oil demand. Therefore, any long positions should be managed carefully, as macroeconomic concerns could easily temper bullish sentiment. Create your live VT Markets account and start trading now.
Start trading now – Click here to create your real VT Markets account
