Wall Street on March 16, 2026 closed sharply higher as the price of oil pulled back below US$95 a barrel (bbl). News reports then explain this to be due to US President Donald Trump’s strong call for “efforts to reopen the Strait of Hormuz.”  

Asian markets like ours opened higher last Tuesday morning, March 17, tracking the rebound of Wall Street following the retreat in the price of oil overnight — a welcome development from concerns regarding the ongoing US-Iran conflict. 

The Nikkei 225 index, the leading index of Japan’s top 225 companies traded on the Tokyo Stock Exchange (TSE) rose 0.75% in early trading, while the broader Topix index or Tokyo Stock Price Index, composed of major capitalization-weighted firms listed on the Prime Market (formerly the first section) of the TSE, also showed gains of over 1%.  

The KOSPI Index or Korea Composite Stock Price Index, the representative market index tracking all common stocks traded on the primary division of the Korea Exchange (KRX), also opened strongly, jumping over 2.9% in morning trading.

Australia’s S&P/ASX 200 added 0.27% in early trades. The S&P/ASX 200 is the benchmark stock market index for the Australian Securities Exchange (ASX) that measures the performance of the 200 largest, most liquid, and publicly listed companies in Australia. The S&P/ASX 200 likewise represents approximately 80% of the total market capitalization of the Australian market, that is used as well to gauge the overall health of the local economy. 

The broader MSCI Asia Pacific Index for the region, rose up by nearly 1%, boosted, also by the pullback in oil prices.  

Even India’s GIFT Nifty (Gujarat International Finance Tec-City Nifty), which indicates the opening for the Indian market, also traded higher by about 111 points or 0.53%, suggesting a positive start following a strong recovery in the previous session. The GIFT Nifty is a US dollar-denominated futures contract based on the NSE Nifty 50 index, traded on the NSE International Exchange (NSE IX) in Gujarat, India. 

The NSE Nifty 50 index is the flagship benchmark index of the National Stock Exchange of India (NSE), representing the weighted average of 50 of the largest, most liquid Indian blue-chip companies across 13 key sectors. It acts as a barometer for the Indian economy, covering roughly 54% of the NSE’s free-float market.

It also provides nearly 20-hour trading hours (6:30 am to 2:45 am IST) for global investors to hedge risks or speculate on the Indian market, particularly acting as a pre-market indicator before Indian equity markets open.

Lastly, both the PSEi or Philippine Stock Exchange Index and the broader All shares Index also ended the day with positive gains with the former closing at 6,026.01, up 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 financials.

On Tuesday, March 17, Wall Street again ended higher for the second consecutive day, as investors continued to rotate back into equities, 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 on higher territory for the second day.

As of mid-morning on Wednesday, March 18, Wall Street futures were trading higher, poised to extend a multi-day rally as investors looked past heightened Middle East tensions and focus on upcoming Federal Reserve policy updates.

In spite of this surprising market uptick, overall investor sentiments continuous to be fragile, as situations could also change rapidly due to the intense volatility of the ongoing conflict in the Middle East.

Global oil supply glut

Behind the market’s fall due to the present tensions in the Middle East, there are some fundamental factors that may explain why the market is able to easily bounce back, one of which is about the oil supply situation in the world.

While the present conflict in the Middle East has sent the price of Brent to surge past US$105/bbl and WTI or West Texas Intermediate to over $100/bbl, the forecast on global oil supply for 2026 to 2028 is expected to exceed demand — a situation expected to create a downward pressure on the price of oil.  

Once geopolitical tensions ease, a global supply glut is anticipated to drive oil prices down, according to J.P. Morgan Chase &Co. (J.P. Morgan). It views the current triple-digit prices of oil as a “geopolitical panic” only 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 placed at $72.88 per barrel (bbl), while WTI Crude is “in the high US$60s as in Dec 2028, contracts were at US$65.49.”

The US Energy Information Administration (IEA) also has a lower price estimate from the current conflict highs to “around US$64/bbl” or a little above for 2027.” IEA explains that current prices include a significant risk premium due to the closure of the Strait of Hormuz; however, based on the two-year futures prices of oil, this premium is expected not to persist for too long. 

Here are the revisions made by the other major investment banks on their long-term oil price targets as of March 16, 2026:

• J.P. Morgan 

It is maintaining a $60/bbl average price for oil in 2026 despite the spike. For 2027, it expects the price of Brent at $57/bbl and WTI at $53/bbl, at the same time warning that prices could drop into the $30s/bbl by late 2027 if a massive global surplus develops post-conflict. It has the most bearish outlook among the major banks.

• The Goldman Sachs Group, Inc

It has hiked its March/April Brent forecast to $98 to $110/bbl, up from approximately $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.  

• Bank of America (BofA) 

It raised its forecast for Brent by 27% to $77.50 from $61/bbl and warned of a $130/bbl peak if the conflict persists through the second half of 2026, while also expecting a retreat to $65/bbl by 2027 once the war ends.

• Standard Chartered PLC

It has the most aggressive revision: it increased its 2026 Brent average price to $85.50 from $70/bbl, while raising its average price for 2027 to $77.50/bbl, citing lasting damage to regional energy infrastructure that will limit supply even after a ceasefire.

• Citi Research

It ramped its Q1 price of Brent to $75 and Q2 to $78/bbl, from $73 and $70/bbl, respectively. However, it is maintaining a bear case of $50 to $60/bbl for late 2026/2027, driven by weak Chinese demand and rapid EV adoption. 

Thus, while the near-term “front-month” prices of oil for March 2026 are elevated due to supply disruptions from the ongoing US-Israel war on Iran, the “back end” of the futures curve is seen to be significantly lower by the said major banks, reflecting market expectations of a return to surplus conditions. 

In other words, the long-term outlook for oil prices is much cheaper than the current spot prices of $93 to $102 because the market views the current supply shock as temporary. 

Need to end the war without being the first to quit 

As of Wednesday, March 18, US President Donald Trump has been quoted by reporters that the conflict will be “wrapped up soon” or will be ending the war in the “very near future” because the Iranian military has been “obliterated.” He has asserted as well that Iran “wants to make a deal” and is seeking a ceasefire. However, Tehran’s Minister of Foreign Affairs Abbas Araghchi has flatly rejected this claim, calling the assertion “delusional” and stating that Iran is prepared to fight “as long as it takes.”

Analysts believe that Trump’s statements are but a sign that he wanted already to end the conflict not only because of the global energy crisis and high oil prices the war has caused, it could also hurt his party’s prospects in the upcoming November US midterm elections, and weaken his grip on both houses of the US Congress.

Aside from the six non-American flag vessels previously attacked at the Strait of Hormuz by Iran last March 11 and 12, and despite the defiant statements of Aragchi, no other vessel has been bombed except the Kuwait-flagged liquefied petroleum gas (LPG) tanker, Gas Al Ahmadiah. It was hit last Tuesday, March 17, by an “unknown projectile” while anchored east of Fujairah, UAE; the vessel sustained minor structural damage and no injuries were reported.

To analysts of the conflict, this dichotomy of Iran’s defiant rhetoric and less acts of aggression may be also a subtle indication of its desire to end the conflict without being the first to quit and be called “chicken.” (TACO: Why Trump walked back on 19% reciprocal tariff on Philippine agriculture)

However, emotions on both sides may just prevail, prolonging the war more than it should be. But come to think of it, with the massive global economic havoc the conflict is creating, on top of the huge costs shouldered at the moment by each of the parties involved, the war may just be ending “soon.”

This could mean, too, that “The market fall may soon be over.” – Rappler.com

(The article has been prepared for general circulation for the reading public and must not be construed as an offer, or solicitation of an offer to buy or sell any securities or financial instruments whether referred to herein or otherwise. Moreover, the public should be aware that the writer or any investing parties mentioned in the column may have a conflict of interest that could affect the objectivity of their reported or mentioned investment activity. You may reach the writer at densomera@yahoo.com)