Wall Street on March 16, 2026 closed higher as oil prices fell below US$95 per barrel (bbl). News reports then explain that this is due to the strong call of the President of the United States Donald Trump for “efforts of reopen the Strait of Hormuz.”
Asian markets like ours opened higher last Tuesday morning, March 17, tracking the recovery of Wall Street following the overnight drop in oil prices – a welcome development from concerns about the ongoing conflict between the United States and Iran.
The Nikkei 225 index, the leading index of 225 major Japanese companies traded on the Tokyo Stock Exchange (TSE), rose 0.75% in early trade, while the broader Topix or Tokyo Price Index, which includes large companies with capitalization weights listed on the Prime Market (formerly the first section) of the TSE above 1, also showed gains.
The KOSPI or Korea Commercial Price Index, a representative market index that tracks all common stocks traded on the primary unit of the Korea Stock Exchange (KRX), also opened strongly, jumping more than 2.9% in morning trade.
Australia’s S&P/ASX 200 added 0.27% in early trade. The S&P/ASX 200 is an Australian Securities Exchange (ASX) stock market index that measures the performance of the 200 largest, most liquid and publicly listed companies in Australia. The S&P/ASX 200 also represents about 80% of Australia’s total market capitalization, which is also used to measure the overall health of the local economy.
MSCI’s broadest Asia Pacific index for the region rose nearly 1%, also buoyed by the pullback in oil prices.
Even India’s GIFT Nifty (Gujarat International Finance Tec-City Nifty), which reflects the opening of the Indian market, also traded higher by about 111 points or 0.53%, suggesting a good start following a strong recovery in the previous session. GIFT Nifty is a US dollar futures contract based on the NSE Nifty 50 index, traded on the NSE International Market (NSE IX) in Gujarat, India.
The NSE Nifty 50 index is the flagship index of the National Stock Exchange of India (NSE), representing a weighted average of the 50 largest, most liquid Indian blue-chip companies across 13 key sectors. It acts as a benchmark for the Indian economy, accounting for about 54% of the NSE’s free market.
It also provides around 20 trading hours (6:30 am to 2:45 am IST) for international investors to hedge or speculate on the Indian market, mainly acting as a pre-market indicator before the Indian stock markets open.
Finally, the PSEi or Philippine Stock Market Indices and the broader All Share Index also ended the day with positive gains with the former closing at 6,026.01, 19.46 points or 0.32% and the latter at 3,349.75, up 8.06 or 0.24%; all sectors were also up except property and finance.
On Tuesday, March 17, Wall Street ended higher again for the second day in a row, as investors continued to return to stocks, despite renewed volatility in oil prices and a cautious tone ahead of the Federal Reserve’s policy decision. Similarly, the PSEi and All Shares index ended at higher territory for the second day.
By mid-morning on Wednesday, March 18, Wall Street futures were higher, poised to extend a multi-day rally as investors looked past tensions in the Middle East and focused on upcoming Federal Reserve policy updates.
Despite this surprising market situation, investor sentiment generally remains volatile, as conditions can also change rapidly due to the high volatility of the ongoing conflict in the Middle East.
Global oil supply
Behind the fall of the market due to the tension in the Middle East, there are some basic factors that can explain why the market can return easily, one of which is about the state of oil supply in the world.
While the current conflict in the Middle East has sent the price of Brent to exceed US$105/bbl and WTI or West Texas Intermediate to more than $100/bbl, the global oil supply forecast for 2026 to 2028 is expected to exceed demand – a situation expected to bring downward pressure on oil prices.
Once geopolitical tensions ease, an increase in global supply is expected to lower oil prices, according to JP Morgan Chase &Co. (JP Morgan). It views the current triple-digit oil prices as a “geographical panic” that will fade once shipping routes normalize.
As of Monday, March 16, the two-year oil price futures (or contracts for delivery in March 2028) are as follows: Brent crude for March 2028 delivery was set at $72.88 per barrel (bbl), while WTI Crude is “in the high $60s as in December 2028, contracts were at $65.9.”
The U.S. Energy Information Administration (IEA) also has a lower price estimate from the current conflict high to “about US$64/bbl” or slightly higher by 2027.” The IEA explains that current prices include a large risk premium due to the closure of the Strait of Hormuz; however, based on oil prices two years from now, this premium is not expected to last very long.
Here are the revisions made by other major investment banks to their long-term oil price targets as of March 16, 2026:
It maintains an average $60/bbl oil price in 2026 despite the increase. For 2027, it expects Brent prices at $57/bbl and WTI at $53/bbl, while warning that prices could drop to the $30s/bbl by the end of 2027 if a large global surplus develops after the conflict. It has the lowest outlook among central banks.
- The Goldman Sachs Group, Inc
It increased its March/April Brent forecast to $98 to $110/bbl, from about $70/bbl. It also raised its Q4 2026 Brent to $71, up 7.58% from $66/bbl and WTI to $67, up 8.06% from $62/bbl for 2027/2028.
It raised its Brent forecast by 27% to $77.50 from $61/bbl and warned of a peak of $130/bbl if the conflict continues into the second half of 2026, while also expecting a drop back to $65/bbl by 2027 once the war ends.
It has a sharper revision: it raised its 2026 average price to $85.50 from $70/bbl, while raising its 2027 average price to $77.50/bbl, citing permanent damage to regional energy infrastructure that will reduce supplies even after a ceasefire.
It raised its Q1 Brent price to $75 and Q2 to $78/bbl, from $73 and $70/bbl, respectively. However, it maintains a bear pocket of $50 to $60/bbl until late 2026/2027, due to weak Chinese demand and rapid adoption of EVs.
Therefore, while the near-month “forward” oil prices for March 2026 have risen due to supply disruptions from the ongoing US-Israeli war against Iran, the “rear end” of the futures curve is seen as very low by the central banks, indicating the market’s expectation of a return to surplus conditions.
In other words, the long-term outlook for oil prices is much cheaper than the current $93 to $102 price range because the market sees the current supply shock as short-lived.
Need to finish the battle without being the first to quit
As of Wednesday, March 18, US President Donald Trump has been quoted by reporters as saying that the conflict will “end soon” or end the war “in the near future” because the Iranian military has been “destroyed.” He also stressed that Iran “wants to make an agreement” and is seeking a ceasefire. However, Tehran’s Foreign Minister Abbas Araghchi has categorically rejected the claims, calling them “illusions” and saying that Iran is ready to fight “for as long as possible.”
Analysts believe that Trump’s remarks are just a sign that he already wanted to end the conflict not only because of the global energy crisis and the high price of oil caused by the war, it may also hurt his party’s prospects in the next US mid-term elections in November, and weaken his ability to hold both houses of the US Congress.
Apart from the six non-US flag ships that were previously attacked in the Strait of Hormuz by Iran on March 11 and 12 last year, and despite Aragchi’s defiant statements, no other ship was blown up except the Kuwaiti-flagged LPG tanker, Gas Al Ahmadiah. It was hit last Tuesday, March 17, by an “unknown missile” while anchored east of Fujairah, UAE; The vessel sustained minor structural damage and no injuries were reported.
For analysts of the conflict, this confusion of Iran’s hate speech and small acts of aggression can also be a subtle sign of wanting to end the conflict without being the first to quit and be called a “chicken.” (TACO: Why Trump backtracked on the 19% flat tax on Philippine agriculture)
However, the emotions of both sides can only prevail, prolonging the war longer than it should be. But think about it, with the huge damage to the global economy that the conflict is causing, on top of the huge costs currently being borne by all parties involved, the war may be ending “soon.”
This could mean, too, that “The market crash may end soon.” – Rappler.com
(This article has been prepared for general distribution to the reading public and should not be considered as an offer, or a solicitation of an offer to buy or sell any securities or financial instruments whether referred to here or otherwise. In addition, the public should be aware that the author or any investors mentioned in this column may have a conflict of interest that may affect the fairness of their investment activities reported or mentioned on the densomera website.
