Market Update: 12th March 2026- Oil Is Rising — And Markets Are Finally Paying Attention

For months the market has been obsessed with AI, rate cuts, and the soft-landing narrative.
Now oil is reminding everyone that the world still runs on energy.

Crude has surged back toward $100 a barrel, driven not by demand surprises but by geopolitics specifically the escalating conflict involving Iran and the growing disruption to shipping through the Strait of Hormuz, one of the most important oil chokepoints on the planet.

When the Strait sneezes, the global economy catches a cold.

This Isn’t Just Another Oil Spike

The recent move in oil isn’t coming from the usual OPEC headlines or a routine supply adjustment.

It’s coming from actual disruptions.

Attacks on tankers and energy infrastructure across the Gulf have raised serious concerns about the flow of oil through the region, a route that normally carries around one-fifth of global oil supply.

That’s why the move in oil has been so sharp.

Markets don’t mind higher prices.
They hate uncertainty about supply.

And right now, the supply picture is getting murky.

Governments Are Already Reaching for the Emergency Tools

The response has been predictable.

The International Energy Agency has coordinated a massive emergency release of strategic reserves roughly 400 million barrels in an attempt to stabilise the market.

But emergency releases rarely solve the real problem.

They buy time.

If shipping through Hormuz remains disrupted, the market will eventually have to price that reality.

The Inflation Problem Just Came Back?

For the past year markets have been celebrating the idea that inflation is fading, and central banks will soon be cutting rates.

A sustained oil rally complicates that story very quickly.

Energy feeds into everything:

• transport

• manufacturing

• agriculture

• aviation

Even a moderate rise in oil can ripple through the entire inflation picture.

Central banks don’t like cutting rates when energy prices are climbing.

Equity Markets Are Still Pretending Nothing Happened

So far, equities are reacting with the usual mix of optimism and denial.

Stocks wobble when oil spikes… then quickly convince themselves it’s temporary.

Sometimes they’re right.

But history is fairly clear on this point: sustained oil shocks eventually show up in growth, inflation, or both.
Usually both.

The Three Things That Matter Now

If oil continues to rise, investors should watch three signals very closely:

1. Inflation expectations

If energy starts pushing inflation higher again, rate cuts get pushed further out.

2. Credit markets

Energy shocks tend to show up here before they show up in equities.

3. Shipping flows through Hormuz

That’s the real story. Everything else is noise.

If the Strait stabilises, oil settles down.

If it doesn’t, markets may have badly underestimated this risk.

The Bottom Line

Markets spent the last six months worrying about technology disruption.

Now they’re being reminded about geopolitical disruption.

Oil doesn’t need to hit $150 to matter.

It just needs to stay high long enough to ruin the comfortable narratives investors have been relying on.

And right now, that’s starting to look like a real possibility.

Anyway, till next time, all of you trade safe!

By James Trescothick
Head of Market Research and Market Analysis

Risk Disclaimer: This information is for educational purposes only and does not constitute investment advice. Financial markets involve risks, and past performance is not indicative of future results. Always conduct your own research and seek professional advice before making investment decisions.