MPC Morning Call 16 March 2026 - Oil Tops $100 as Iran War Enters Third Week
Global markets closed the week sharply lower as the US–Iran conflict entered its third week with no ceasefire in sight. Brent crude settled above $103 per barrel, its first close above $100 since August 2022, after the US struck military targets on Iran’s Kharg Island oil hub
SUBSCRIBE TO THE MORNING CALL ON YOUTUBE S&P 500 Heatmap — Friday 14 March 2026 Major Indices — Daily & 5-Day Net Change (14 March 2026) MPC Morning Call 16 March 2026 — Oil Tops $100 as Iran War Enters Third Week Global markets closed the week sharply lower as the US–Iran conflict entered its third week with no ceasefire in sight. Brent crude settled above $103 per barrel — its first close above $100 since August 2022 — after the US struck military targets on Iran’s Kharg Island oil hub. All three major US indices posted weekly declines, the dollar surged to fresh year-to-date highs, and rate-cut expectations were slashed as traders repriced a prolonged energy shock. Investor focus now shifts to a blockbuster week of central bank decisions including the RBA, Fed, BOJ, ECB and Bank of England. Iran War Escalation: No End in Sight The US–Iran conflict showed no signs of resolution over the weekend, with both sides signalling continued hostilities. President Trump said Iran was “ready to make a deal” but that the terms were not good enough, while Iranian Foreign Minister Abbas Araghchi rejected any suggestion Tehran had sought a ceasefire. The US carried out strikes on military facilities at Kharg Island — Iran’s key oil export hub — with Trump threatening to target oil infrastructure if Iran continues blocking the Strait of Hormuz. The Pentagon estimates the mission could take four to six weeks. The conflict has left approximately 3,750 dead across the region and has spread to involve attacks on Gulf states, with the UAE intercepting over 1,600 drones and 300 missiles since fighting began. The IEA has committed to releasing 412 million barrels from emergency reserves — its largest-ever coordinated action — to help offset supply disruptions. Oil Breaks $100 as Strait of Hormuz Stays Shut Brent crude surged 11% for the week to settle at $103.14 per barrel, while WTI closed at $98.71. Oil price volatility has hit five-year extremes, with the CBOE oil volatility index reaching 120% — surpassing the peak seen after Russia’s invasion of Ukraine. Iran’s Supreme Leader Mojtaba Khamenei has vowed to keep the Strait of Hormuz — through which a fifth of the world’s oil flows — closed, although Iran is reportedly considering allowing Chinese-linked tankers safe passage. The US Treasury issued a partial 30-day waiver for purchases of sanctioned Russian oil to ease supply concerns. The ripple effects extend well beyond energy: sectors from semiconductors (hit by helium supply disruptions after a Qatari LNG plant closure) to fertilisers, chemicals, automakers and retailers are all facing cost pressures. European wholesale gas prices have jumped nearly 58% since the conflict began. Shifting Rates Outlook: Stagflation Fears Build Markets have dramatically repriced rate-cut expectations, with traders now anticipating just 20 basis points of Fed easing this year compared to 50 bps priced in before the conflict. The next Fed rate cut has been pushed back to mid-2027. Friday’s US data showed core PCE inflation at 3.1% year-on-year — well above the Fed’s 2% target — while Q4 GDP was revised sharply lower to just 0.7% annualised growth from the initial 1.4% estimate. The combination of sticky inflation, rising energy costs and weakening growth has amplified stagflation concerns. Two-year Treasury yields hit a six-month high before easing to 3.73%, while 10-year yields rose to 4.28%. The dollar index climbed to fresh 2026 highs, putting pressure on the euro (down 0.8% to $1.1417) and the yen (hitting 159.66 per dollar, its weakest since July 2024). Global Equities Slide: Markets Reprice Broader War Risk The S&P 500 fell 0.6% on Friday to close at 6,632.53, extending its losing streak to three weeks and sitting 5% below its January record. The Nasdaq dropped 0.9% and the Dow shed 0.3%. European stocks also declined, with the STOXX 600 down 0.5% on Friday. Barclays warned the STOXX 600 could fall a further 13% if oil sustains near $100. Global stocks have lost 5.5% since the conflict began — the worst monthly performance since 2022 — with Asian markets the hardest hit. In corporate news, Adobe sank 7.6% after announcing CEO Shantanu Narayen will step down after 18 years. Gold fell 1.3% to $5,014 per ounce, underperforming as a safe haven this time around, weighed down by a surging dollar and higher bond yields. Defence and energy stocks have been notable outperformers. Commodities, Energy & FX Commodities, Energy & FX — 14 March 2026 ASX Today: Futures Point Lower Amid Oil Shock ASX 200 SPI futures are trading at 8,547, down 61 points or 0.7%, pointing to a softer open on Monday. The energy shock is likely to weigh on transport, retail and consumer discretionary sectors given elevated fuel costs, while energy producers and miners with oil exposure could see support. Banks may face headwinds as the shifting rates outlook complicates the margin picture. Australian fertiliser and agricultural stocks remain…
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