Oil prices edged lower on Wednesday morning after data from the American Petroleum Institute indicated a build-up in U.S. crude inventories, news agency Reuters reported.
Crude oil price on March 18
Where is oil headed from current levels?
U.S. crude inventories rose by 6.56 million barrels for the week ended March 13, according to market sources referencing API figures released on Tuesday, the report added.
Crude oil price on March 18
Brent crude futures fell by $1.15, or 1.11%, to $102.27 a barrel as of 7:25 am. U.S. West Texas Intermediate crude declined $1.54, or 1.6%, to $94.67.Adding to the ease, U.S. President Donald Trump said on Tuesday that ships may soon resume passing through the Strait of Hormuz, although he did not specify a timeline. He also criticised NATO and other allies for not backing U.S. operations in West Asia with warships to help secure the crucial route.
U.S. oil prices have surged more than 60% so far this year, with most of the gains coming after the conflict in Iran began in late February. The rise in crude has also pushed up prices of related products, fuelling inflation concerns across global economies.
On the geopolitical front, Iran confirmed that its security chief Ali Larijani was killed by Israel on Tuesday, making him the most senior figure targeted since the first day of the U.S.-Israeli conflict.
The U.S. military said on Tuesday it had struck sites along Iran’s coastline near the Strait of Hormuz, citing risks posed by Iranian anti-ship missiles to global shipping.
Where is oil headed from current levels?
Looking ahead, crude prices could move higher from current levels. According to Kayanat Chainwala of Kotak Securities, oil may rise to $120 per barrel in the near term and potentially touch $150 if the conflict continues beyond a month and geopolitical tensions remain elevated.
Nuvama Institutional Equities echoes the same view. The continued closure of the Strait of Hormuz, which handles around 20 million barrels per day, could push crude prices to the $110–150 per barrel range over the next 4-8 weeks. While the release of strategic reserves may provide some near-term relief, it could also lead to a rebound in demand as inventories are restocked later.
Broader stress is likely to emerge beyond $125 per barrel. Oil marketing companies could see sharp earnings pressure, LPG subsidy burdens may rise significantly, and risks to LNG throughput could increase. In such a scenario, the likelihood of policy intervention also rises. Overall, the first $40 per barrel increase in crude can typically be managed through tax adjustments, but beyond that, the strain on the system becomes more visible, Elara said.
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