International oil prices continue to climb as geopolitical tensions in the Middle East intensify. On March 23, ICE Brent crude surged past $109 per barrel, marking a gain of nearly 3%. WTI crude followed a similar upward trajectory, rising above $101 per barrel with an increase exceeding 3%. In early trading, the European benchmark natural gas contract also saw a spike, climbing more than 5% at one point.
In domestic commodity futures markets, energy and chemical products led gains by the close on March 23. Propylene, butadiene rubber, LPG, plastic, and polypropylene all hit their daily upside limits. Crude oil futures rose over 7%, while fuel oil advanced nearly 6%.
DBS Group Research noted that as conflicts in the Middle East persist, increasing investments in alternative oil sources for Asia could be risky. If the situation prolongs, oil prices may remain above $100 per barrel for an extended period, with potential to reach $150 or higher over the next two quarters. Analysts recommend maintaining investments in upstream and integrated oil company stocks but caution that further significant increases in positions may carry risks.
BMI analysts stated that with severe constraints on production and exports, investors are highly sensitive to any supply threats that could hinder post-conflict recovery. They suggested that if hostilities continue, Brent crude could reach a range of $110 to $130 per barrel within the next one to two weeks.
Goldman Sachs has also substantially raised its oil price forecasts, now projecting average Brent prices of $110 per barrel for March and April, up from a previous estimate of $98. For WTI, the bank expects averages of $98 per barrel in March and $105 in April. Goldman's scenario assumes that flows through the Strait of Hormuz will be maintained at just 5% of normal levels for six weeks, followed by a gradual one-month recovery. Analysts believe prices will continue to rise during this period until investors are confident that long-term disruptions can be ruled out.
On the geopolitical front, former U.S. President Donald Trump stated on social media on March 21 that if Iran did not fully reopen the Strait of Hormuz to all vessels within 48 hours, the U.S. would target Iran's power plants. In response, Iran's Islamic Revolutionary Guard Corps issued a statement on March 23 warning that any attack on Iran's electrical infrastructure would be met with reciprocal retaliation against Israeli power plants and those supplying U.S. military bases in the Middle East.
The same day, Iran's Defense Committee emphasized that the only way for non-belligerent vessels to pass through the Strait of Hormuz is through coordination with Iranian authorities. The committee also reaffirmed Iran's commitment to "proportional retaliation" and promised an "immediate and devastating response" to any attacks on its power plants or energy infrastructure. Additionally, the committee warned that if Iranian coastal areas or islands are attacked, it will cut off Gulf shipping routes and communication lines, and deploy explosive naval mines, including from its own coastline.
Separately, on March 23, Iran's armed forces announced that its naval air defense systems had shot down two U.S. attack drones near the port of Bandar Abbas in the Strait of Hormuz. The statement indicated that the drones were detected and precisely intercepted before they could launch an attack on Iranian naval units.
Analysts suggest that the downing of the drones has heightened market concerns over supply disruptions. Regular military confrontations near the Strait of Hormuz could lead to significant increases in shipping insurance costs and transit times, creating ongoing disturbances in the global energy supply chain.