Oil prices: Opportunists are unhinged

Brent crude breached the US$100.00 per barrel mark on March 13, 2026 (at US$100.64 and trading between US$99.22 and US$100.64). West Texas Intermediate, on the other hand, was at US$95.80 (trading between US$95.49 and US$97.00). With such increase so abrupt, most pundits and doomsayers alike are entertaining the idea that recession is likely to obtain if the war is prolonged.

Globally, in 2008, we saw the rise of oil prices to US$147.00 (historically, the highest so far) per barrel in July when the US (the world’s biggest consumer) economy was really doing well and two emerging economies in China and India demanded for more supply. With internal conflicts obtaining also in Nigeria and Iran at that time, production stagnated. Thus, prices soared.

However, towards the end the year, we all witnessed prices plummeting to US$37.00 per barrel.  That was when the USA was in dire economic crunch and its demand for oil dropped tremendously.

That era was then referred to as the Great Recession. It was caused by the housing bubble in the USA which resulted to record foreclosures. Then, a financial crisis flung markets worldwide into a nosedive.

Today, prices are on the rise again as missiles and drone rained in Iran and the Gulf Region. While similarly situated with Russia (in the Russia-Ukraine war), the consequences or influences to oil prices are quite different. Yes, the Russia-Ukraine war resulted to oil prices breaching US$120.00 per barrel on March 8, 2022 or just twelve (12) days after. Then, European benchmark Brent North Sea oil reached US$133.18 while New York-traded West Texas intermediate hit US$123.64.

This was largely attributed then to the brutal sanctions on Russia from the West. Kudos though to Iran for scaling up its production, oil prices stabilized a bit. Had it not for its output augmentation, probably, prices could have soared higher. The huge difference though this time is that, Iran has the ability to disrupt and is disrupting deliveries of its neighboring countries due to its control over the Strait of Hormuz.

Historically though, the USA used to play a significant role in bringing down oil prices.  Then, when it responded, prices stabilized or even went down. Why? This is because the USA is the world’s largest oil producer.  In fact, when threatened by the production cuts made by OPEC member countries and Russia in 2018, according to The Financial Times, “the US Energy Information Administration reported that it increased its shale output by 780,000 barrels per day in 2018, more than double the 380,000 barrels per day it expanded in 2017.”

The question now is, can they do it this time?  According to the US Energy Information Administration (EIA), though it plans to raise it in 2027 due to soaring prices, increasing it today or in the short term to address the shortage brought about by the Iran war is simply impossible.  This is due largely to the need to build the infrastructure that shall augment production.

Obviously, therefore, it won’t happen overnight. Moreover, investors are also looking at desirable or viable prices to recoup their investments. So that, even if they can augment production, that they can sell their oil at the world’s preferred prices is not guaranteed.  Obviously, therefore, the only available option is to stop this war. That’s a no-brainer.

However, granting that a protracted war maybe avoided, in us, there is still a nagging issue that we have to address. That of the country’s oil retailers. To recall, a few weeks ago, just as the first strike on Iran flashed real time on everyone’s screen, some oil retailers immediately raised their prices.

Truth be told, driven by greed, some of our retailers refuse to be fair and simply cash in or take advantage in all situations. As observed in the past, as clear as daylight, when global oil prices go up, automatically, some oil retailers raise their prices not later than tomorrow. As if they just purchased their inventories today. When prices go down, these same retailers do not reduce prices automatically. Well, logically, because what they have in their tanks were purchased when prices were still high.

Simply put, they come straight when global prices go down but are cheats when prices go up. Just pure opportunists.