March 2026 - Portland Pricing

Monthly Pricing - 02/03/2026

February opened with Brent crude trading at approximately $66/bbl. During the first half of the month, structural oversupply concerns continued to cap upside momentum, while intermittent geopolitical risks and U.S. weather-related supply disruptions provided underlying support. As a result, prices remained broadly range-bound between $66 and $69 per barrel.

OPEC+ compliance remained largely intact; however, the group refrained from signalling deeper production intervention despite softer pricing. This reinforced market expectations that producers are currently prepared to tolerate lower price levels in order to preserve market share rather than aggressively defend price.

The International Energy Agency (IEA) maintained its forecast of a 3.7 million bpd market surplus and revised down its global oil demand growth projection to 850,000 bpd for the year, an 8.6% reduction from the previous month’s outlook. This revision further strengthened the prevailing narrative of supply outpacing demand.

In the second half of February, geopolitical tensions intensified and shifted market sentiment. Escalating friction between the United States and Iran drove renewed risk premium into crude markets. Iranian state media reported that the Islamic Revolutionary Guard Corps (IRGC) had commenced military exercises in the Strait of Hormuz, while U.S. naval forces increased their presence in the region.

Diplomatic negotiations between the two sides failed to reach a resolution. On 28 February, the United States and Israel launched what was described as a “massive” and ongoing strike targeting elements of Iran’s leadership and military infrastructure. Reports indicated that Iran’s Supreme Leader, Ayatollah Ali Khamenei, was killed in the operation. The developments significantly heightened regional instability concerns and injected substantial volatility into oil markets heading into month-end.

Price Drivers

Supply IEA surplus forecast maintained: The IEA continued to project a 3.7 million bpd surplus, reinforcing the structural oversupply narrative. U.S. weather disruptions: Severe cold weather in parts of the United States temporarily impacted production and refinery operations, creating short-term tightening in crude and distillate balances. OPEC+ policy steady: Compliance remained broadly intact, with no indication of deeper production cuts despite price softness. The group appears willing to tolerate lower prices to protect market share.

Demand IEA demand revision: Global oil demand growth was revised down to 850,000 bpd, an 8.6% reduction from the prior month’s outlook, reflecting weaker macroeconomic momentum. OECD weakness persists: European industrial output and transport fuel demand remained subdued, limiting upside for distillates.

Geopolitical U.S.–Iran escalation: Rising tensions culminated in military strikes late in the month, significantly increasing regional instability and injecting a renewed risk premium into oil prices. Market volatility spike: Late-month events drove sharp intraday price swings as traders repriced geopolitical risk exposure heading into March. Strait of Hormuz disruption: Shipping traffic through the Strait of Hormuz was effectively paralysed following a sharp military escalation and a direct strike on the oil tanker Skylight. Markets were forced to price in the immediate risk to roughly 20% of global oil flows that typically pass through the chokepoint.