Morning Brief | Mar. 10, 2026

Oil markets are attempting to recover their footing after one of the most violent trading sessions on record. Crude prices swung from panic highs near $120 a barrel to the mid-$80s in less than 24 hours as investors abruptly unwound the war premium that had built into markets after the effective closure of the Strait of Hormuz following comments from President Donald Trump suggesting the conflict with Iran could end “very soon,” triggering a broad relief rally across global equities and a sharp drop in volatility.

Beneath the market rebound, the physical shock to the energy system remains unresolved. Shipping through the Persian Gulf remains severely constrained, Gulf producers are still cutting output as storage tanks fill, and Iranian officials are threatening to halt all oil exports from the region if attacks continue. For markets, it's a precarious balance: financial assets are trading a fast de-escalation, while the energy system itself is still operating under wartime conditions.

MARKET READOUT (7:23 a.m. ET)

US 2-year, 10-year: +0.9bps / +0.3bps
DXY: -0.54% | USD/JPY: +0.06% | USD/CNH:-0.12%
S&P Futures: +0.08% | Euro Stoxx: +2.41%
Nikkei: +2.88% at close | Kospi: +5.35% at close | Hang Seng: +2.17% at close
Brent, WTI: -7.67% ($86.53) / -7.38% ($87.78) | Copper: +1.16% | Gold: +1.88%
VIX: 24.13 (-5.36)

ON THE TAPE

Oil records one of the biggest intraday reversals on record.
Crude prices on both Brent and WTI surged toward $120 a barrel at the start of trading Monday before collapsing back into the $80s as the session progressed. The swing — one of the largest in oil market history — underscores how heavily prices are now trading on geopolitical headlines rather than fundamental supply signals.

Trump signals war may end “very soon.”
Markets staged a sharp rebound after President Donald Trump said the conflict with Iran was “very complete, pretty much,” suggesting the military campaign was ahead of schedule. The remarks marked a sharp shift from weekend rhetoric threatening broader strikes across Iran and helped trigger a broad unwind of the war premium across commodities.

Gulf producers deepen output cuts as exports stall.
Saudi Arabia, Iraq, the UAE and Kuwait have collectively cut roughly 6.7 millions of barrels per day of production — about 6% of global supply — as the near-closure of Hormuz prevents crude shipments from leaving the region. With storage tanks filling near production sites, producers are increasingly forced to curb output, a dynamic that removes physical supply from the global market.

Governments consider emergency energy measures.
Group of Seven energy ministers are meeting in Paris to discuss a possible coordinated release of strategic petroleum reserves. Meanwhile, several Asian governments have begun implementing fuel conservation measures, and Japan's trade minister Ryosei Akazawa said his country will support an SPR release.

IMMEDIATE TELLS

1. Risk assets are rebounding sharply. Equities across Asia and Europe have staged a broad recovery after Monday’s selloff, while South Korea’s Kospi jumped more than 5% and Europe Euro Stoxx index is climbing by nearly 3%. The rally suggests investors are quickly fading the worst-case scenario of a prolonged regional war.
2. Oil is falling — but not because supply returned. Crude prices have dropped roughly 7%-8% this morning, but the move reflects shifting expectations about the duration of the conflict rather than an improvement in physical flows. Tanker traffic through Hormuz remains severely constrained and Gulf producers continue cutting output.
3. Volatility is collapsing from panic levels. The VIX has fallen sharply from above 30 to the low-20s as traders unwind hedges put on during Monday’s market panic. The decline signals a partial normalization of risk sentiment — though volatility remains elevated compared with levels seen earlier this year.
4. The dollar is weakening as the war premium fades. Currency markets are showing a modest shift back toward risk appetite, with the dollar index down more than half a percent this morning. Emerging-market currencies and Asian equities are among the biggest beneficiaries of the move.
5. Safe-haven demand is rotating rather than disappearing. Gold is climbing even as oil falls, reflecting continued demand for geopolitical hedges. The pattern suggests investors remain cautious despite the broader rebound in risk assets.

TRUMP BLINKS, MARKET SWINGS

The dominant market story today is not simply that oil fell, but instead that markets violently repriced the duration of the war based solely on comments from President Trump that the conflict could end “very soon.” Just days after threatening broader strikes and warning Iran could face “very hard” attacks, Trump on Monday instead described the campaign as “very complete, pretty much” in an interview with CBS News and said the operation was “way ahead of schedule,” adding that the war could be over “very soon.” The comments came as advisers reportedly urged the White House to consider an exit path amid surging oil prices and fears a prolonged conflict could trigger economic and political backlash, per The Wall Street Journal.

But the move is important for what it is — and what it is not. This is not a conclusion that the conflict is over, but instead a repricing from open-ended wartime escalation toward possible early containment. Trump is now trying to sell a short-war narrative to markets, yet the signals from Washington remain contradictory. The president said he was prepared to keep striking Iran if the country blocks oil shipments through the Strait of Hormuz, while officials acknowledge the US may struggle to disengage as long as Iranian attacks on regional targets continue and Israel presses the offensive.

At the same time, Iranian leaders are sending the opposite signal. The Islamic Revolutionary Guard Corps warned that if attacks continue “not one liter of oil” will be allowed to leave the Middle East, effectively threatening to shut the Strait of Hormuz entirely. Iran's parliamentary speaker Mohammad Bagher Ghalibaf said his country "absolutely" is "not seeking a ceasefire."

'The biggest crisis the region's oil and gas industry has ever faced'

If Trump’s comments explain the financial rebound, comments from Saudi Aramco CEO Amin Nasser explain why the underlying energy story has not actually improved. The Saudi Aramco chief said this morning on the company's earnings call that the consequences for global oil markets could be “catastrophic” if disruption in the Strait of Hormuz continues — a crucial industry-level signal in today’s newsflow because it came not from traders or politicians but from the head of the world’s top oil exporter.

The core issue is that the problem is no longer just a matter of price. Saudi Arabia, Iraq, the UAE, and Kuwait are now cutting production because exports still cannot move normally through Hormuz and storage is filling up. On Aramco’s earnings call Tuesday, Nasser called the conflict and its tendrils “the biggest crisis the region’s oil and gas industry has faced.” He said Aramco can reroute barrels west, but only partially: the east-west pipeline has capacity of up to 7 million barrels per day, of which roughly 2 million bpd feeds western refineries, leaving about 5 million bpd available for crude export.

That distinction matters. A war premium can evaporate quickly if traders believe the conflict will end soon, but White House comments don't solve a real physical bottleneck. Nasser said Aramco could ramp volumes back “in days and not weeks” if flows normalize, but he also warned that a prolonged disruption would pull a massive volume off the market. As a reminder, almost 20% of the global supply, or roughly 17 million to 18 million bpd, moves through Hormuz.

SECOND-ORDER SHOCKS

As the panic spike in crude has eased, attention has begun shifting toward the war’s next-order consequences. Washington is now openly considering whether loosening some sanctions on Russian oil, particularly for India, could help cool energy prices. Even if the administration insists any relief would be narrow, the logic is clear: the White House is already looking for supply valves outside the Gulf.

At the same time, the political backlash is building here in the states. Senate Democrats are threatening war powers votes and demanding public hearings with Secretary of State Marco Rubio and Secretary of Defense/War Pete Hegseth, pushing to force the administration to defend the legal and strategic basis for the strikes in the open. The moves by Democrats introduce a domestic constraint on how long Trump can sustain this operation, especially if gasoline prices remain high and the promised quick end fails to materialize. US gas prices at the pump are now averaging $3.539 per gallon, up from $2.921 one month ago, per AAA.

And beneath both of those stories sits a broader market stress signal. Bloomberg is reporting that major multi-strategy hedge funds, including Millennium, Balyasny, and Point72 took heavy losses last week as the war detonated crowded positioning and forced portfolios through one of the most violent cross-asset whipsaws in years. In China, the government bond curve has steepened to its widest in years as inflation fears hit long-end debt, and Beijing is boosting its oil imports to hedge against supply disruptions. In the metals market, copper is rebounding with risk today, but aluminum, methanol, LNG, and crop-linked fuel inputs are all showing that the conflict is bleeding beyond crude into the wider industrial commodity chain.

Elsewhere...

In Russia, European officials are warning that Moscow may be the clearest geopolitical beneficiary of the Iran war so far. Higher energy prices provide a direct boost to Kremlin revenues at a time when Russia is still financing its war in Ukraine, while Western military attention and diplomatic bandwidth shift toward the Middle East.

In China, Beijing appears better insulated than most energy importers. Customs data show Chinese crude imports surged roughly 16% in the first two months of the year, per Bloomberg, as the country continued to build strategic and commercial stockpiles. Analysts estimate China now holds roughly 1.4 billion barrels in reserve — enough to offset a full cutoff of Middle Eastern imports for several months.

In Asia, governments are already moving to conserve fuel as the conflict squeezes energy supplies. In India, for example, New Delhi has invoked emergency powers to redirect liquefied petroleum gas from industry toward households. The measures underscore how quickly the Middle East shock is beginning to ripple through energy-importing economies.

Closing thoughts...

Monday’s price action looked like the market trying to price the worst-case version of this war. Today’s price action looks more like the market trying to calm itself down. But the key distinction: markets received a political de-escalation signal, not a physical resolution signal. President Trump is attempting to compress the timeline of the conflict, suggesting the war could end “very soon” and portraying the operation as already ahead of schedule. But the Strait of Hormuz remains essentially closed.

That leaves markets in an uneasy middle ground. The panic spike in crude may have faded, but the structure of the shock has not. As long as tanker traffic through the Strait of Hormuz remains constrained and Gulf producers continue curbing output, the question for investors will shift from how high oil prices can spike to how long the global economy can absorb the disruption.