Oil Prices Surge Again! Fed Rate Decision This Week

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Due to the ongoing escalation of the Middle East situation, international oil prices continued to rise after opening on March 16, Beijing time. Brent crude futures broke through $106 per barrel, up 3.3% intraday; WTI crude futures rose to $102.44 per barrel.

The stock markets in Japan and South Korea opened with mixed results. The Nikkei 225 index opened down 170.05 points, a 0.32% decline, at 53,649.56 points; the KOSPI index in South Korea opened up 33.12 points, a 0.6% increase, at 5,520.36 points.

This week, global capital markets will迎来 a “Super Central Bank Week.” On March 19, the Federal Reserve, Bank of Japan, and European Central Bank will announce their interest rate decisions. Market expectations are that the Fed will keep rates unchanged. Additionally, the central banks of Canada, Indonesia, Brazil, Sweden, Switzerland, and Russia will also release their rate decisions successively.

On the macroeconomic front, according to Xinhua News Agency, the Japanese government plans to release oil reserves starting March 16 to ease the rising oil prices caused by tensions in the Middle East. The total release will be about 80 million barrels, equivalent to Japan’s oil supply for 45 days, marking the largest release since Japan established its national oil reserve system in 1978.

Middle East Tensions Continue to Escalate, International Oil Prices Rise at Opening

The ongoing Middle East tensions continue to affect global markets. On Monday, international oil prices surged over 3% at the open. After rising more than 40% over the past two weeks, Brent crude is trading around $105, while WTI is about $101.

Meanwhile, U.S. stock index futures opened slightly lower. S&P 500 futures and Nasdaq 100 futures declined modestly by 0.2%.

The geopolitical situation in the Middle East continues to evolve. According to Xinhua News Agency, U.S. President Trump stated on the 14th that Iran is prepared for ceasefire negotiations but he is not ready to reach an agreement “because the terms are not good enough.”

In a phone interview with NBC, Trump said he is currently unwilling to sign an agreement to end military actions against Iran. He stated, “Iran wants to make a deal, but I don’t want to because the terms are not good enough.” He also said that any agreement must be “very solid.” When asked about potential terms for ending the war, Trump replied, “That I won’t tell you.” However, he emphasized that Iran’s full abandonment of any nuclear plans should be part of the deal.

Regarding oil price trends, Goldman Sachs recently released a research report stating that due to damage to Middle Eastern energy infrastructure and disruptions in the Strait of Hormuz, the average price of Brent crude in March is expected to exceed $100 per barrel, with April’s average dropping back to $85.

For the oil price outlook in the second half of the year, Goldman Sachs believes that if the disruptions in energy transportation do not worsen further, Brent crude could gradually fall back to the $70+ per barrel level; however, if the disruptions last longer than expected, prices could reach higher peaks and remain elevated by year-end.

Japanese Government to Release Oil Reserves Starting March 16

Approximately 80 million barrels

In response to soaring oil prices, several countries have initiated measures. Member countries of the International Energy Agency (IEA), including the UK, Germany, and Austria, have stated they will cooperate with the IEA’s release of 400 million barrels of strategic petroleum reserves.

According to Xinhua News Agency, the Japanese government will start releasing oil reserves from March 16 to mitigate the price increases caused by tensions in the Middle East. The total release will be about 80 million barrels, the largest since Japan established its national oil reserve system in 1978.

Japan’s oil reserves include both private and national reserves. By December 2025, Japan’s national reserves are expected to sustain 146 days of supply, while private reserves can cover 101 days. Since transporting reserves from storage bases to refineries takes time, the Japanese government has decided to first utilize private reserves.

“Super Central Bank Week” Arrives

Federal Reserve Likely to Keep Rates Unchanged

This week, major global markets will see continuous key events. The Federal Reserve, European, UK, and Japanese central banks will announce their rate decisions. Additionally, the NVIDIA GTC conference and the Global Optical Communications Conference (OFC) will be held. The market is also closely watching the “Quadruple Witching” day in the U.S.

The NVIDIA GTC 2026 conference will be held from March 16 to 19 in San Jose, California. As a leading event in AI computing power, it will attract over 30,000 participants from more than 190 countries and regions worldwide. The 2026 Global Optical Communications Conference will take place from March 15 to 19 in Los Angeles.

Regarding the Fed’s rate decision, the market generally expects rates to remain unchanged. Senior analyst Jerry Chen from Gain Capital said that the inflation risk from rising oil prices might delay the Fed’s rate cuts, possibly pushing them into the fourth quarter.

Chen also noted that from the perspective of international capital flows, the U.S. dollar still plays an irreplaceable role as a safe haven during major crises, which could tighten short-term dollar liquidity in global markets. If the oil supply crisis persists for a long time, both oil prices and the dollar index are likely to continue rising.

Author: Fan Zimeng

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