Daily Energy Market Update March 9,2026

Liquidity’s Daily Market Overview

Energy futures are much higher today as oil facilities in the Mideast are being targeted and several Mideast producers have been forced to shut in more output. As ING writes : "the situation appears to be deteriorating further." Yet, it is worth noting that the energies are well off their overnight highs as reports cite a possible release of oil reserves.

Iraq's oil production is down 70% to 1.3 MMBPD compared with a production level of 4.3 MMBPD before the war began. Output has been shut in as the country is unable to export oil via the Strait of Hormuz. "Crude storage ⁠has reached maximum capacity and the remaining output after the major cut will ​be used to supply the country's refineries," said an official with the state-run Basra ​Oil Company (BOC), which manages production and export operations from the southern fields. Iraq's exports also fell sharply to an average of ​around 800 MBPD on Sunday, with only two tankers loading because vessels cannot move ‌freely ⁠through the strait to Iraq's southern terminals, the source said. Iraq’s oil exports from the southern oilfields stood at 3.334 MMBPD in February, as per Reuters reporting. Iraq  relies on crude sales for nearly all public spending and more than 90% of ⁠its income.

Kuwait declared force majeure Saturday. (Reuters) Kuwait reportedly has cut output by as much as 300 MBPD. (ING) Shutting in an oil well risks long-term damage to reservoir pressure and incurs high restart costs, usually making it a measure of last resort. Restarting production can take days or even weeks depending on the reservoir. (WSJ)

Saudi Aramco has begun cutting output at two oilfields, two sources told Reuters. It was not immediately clear at which fields and by how much production was being curtailed. Storage is starting to fill up, as per Bloomberg reporting. A Kpler analyst says that Saudi Arabia is not cutting output, but that this is a reallocation of supply. “The reduction is happening in fields that do not produce Arab light grades which can be exported via the Yanbu terminal."  Separately, a report from WSJ says a drone attacked a Saudi oil field (Al Berri that produces 250 MBPD)-although the WSJ report cites minor damage. Saudi Arabia intercepted drones that were heading toward the 1 MMBPD Shaybah oil field over the weekend. (Bloomberg) Saudi Arabia has directed a great deal of its crude for export to its Western ports. Shipments from its western terminals have surged to a rate of about 2.3 MMBPD so far this month, ship-tracking data compiled by Bloomberg show. While that’s about 50% more than the kingdom has shipped from Red Sea in any month since the end of 2016, it’s far below the 6 MMBPD that the country has exported from the Persian Gulf in recent months.

G7 finance ministers, in an emergency meeting on Monday, will discuss a possible joint release of petroleum from reserves coordinated by the International Energy Agency.  Three G7 countries, including the US, have so far expressed support for the idea, according to the people familiar with the talks. The meeting to be held is set to start at 8:30 AM. One person said some US officials believe a joint release in the range of 300-400 MMBBL — 25 to 30 per cent of the 1.2 billion barrels in the reserve — would be appropriate.  (Financial Times)

On Sunday, US Energy Secretary Wright said that the oil market is currently pricing in a fear premium that won’t last. The war will only temporarily disrupt markets and ship traffic, and the timeline for things to normalize “in the worst case” is weeks, rather than months, he said on CNN. For shipowners and charterers operating in the region, however, the cost of insurance is not the major concern holding up traffic. Instead, they worry about the safety of vessels and crew, and say they would need full naval escort — along the lines of Operation Prosperity Guardian, a coalition to safeguard shipping in the Red Sea — or preferably an end to hostilities.  (Bloomberg)

The Strait of Hormuz isn't closed because of missiles. It's closed because insurers pulled the plug, as per one comment. Protection and indemnity coverage for the strait vanished on March 5. That single move turned a war zone into a no-go zone for commercial shipping. No Protection & Indemnity insurance means no port entry, no canal transit, no financing. (Supply Signal) The US announced on Friday that it would roll out maritime reinsurance for the Persian Gulf region. The facility will cover losses up to about $20 billion “on a rolling basis”, according to a statement.  (Bloomberg)

Retail fuel prices in the US have risen further today. Gasoline at the pump is averaging $3.478 today, as per AAA data. Since Friday February 27, before the Iran conflict began, the gasoline price average has risen by 49.6 cents. The diesel price average at the pump today is $4.656. That is up 89.9 cents since Friday February 27.

For analysts at ING, the base case is now four weeks of disruption to oil supplies— two of full upheaval and two weeks of 50%. The bank’s most dramatic scenario is a three-month, full disruption to oil and liquefied natural gas flows. This would likely see oil prices spiking to records through the second quarter, the bank’s analysts wrote in a note. (Bloomberg)

The monthly oil reports from the EIA, OPEC and IEA are to be released this week. The EIA's STEO will be released tomorrow Tues. 3/10. OPEC's report is due out Wednesday 3/11 and the IEA's monthly oil market report is set for release Thursday 3/12.

Energy Market Technicals

Momentum is overbought for the energies as they yet again test their upper bollinger bands.

WTI spot futures have resistance at 111.18-111.24 and then at the overnight high at 119.48. Support is seen at 96.25 and then at 92.51-92.61. The DC chart's upper bollinger band intersects at 94.95.

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