Oil prices spike to more than USD 100/b

Oil prices have spiked to more than USD 100/b as markets react to the ongoing effective closure of the Strait of Hormuz caused by Iranian attacks and threats to shipping and announcements from regional oil companies that they are adjusting production because of a lack of export channels. Since the start of trading on 9 March 2026, Brent futures have jumped more than 27% to USD 117.92/b.

The national oil company of Kuwait, KPC, has declared force majeure on shipments of crude oil as it cuts back on output. Kuwait produced roughly 2.6m b/d as recently as February but has not said how much it would restrain output. In the UAE, ADNOC stated that it was “managing offshore production levels to address storage requirements” but did not give any specifics on production restraint. Saudi Arabia’s ministry of defence noted that it had downed a drone heading toward the Shaybah oil field.

Vessels transiting the Strait of Hormuz have essentially dropped to 0 in the most direct economic impact of the US – Israel air war against Iran. Air traffic in the UAE has resumed on limited schedules by national carriers.

Nonfarm payrolls in the US massively missed estimates in February with total payrolls falling by 92k and the worst monthly print since October last year when the economy shed 140k jobs. Job losses were concentrated in the leisure, education and health care sectors with very few industries reporting any hiring last month. The unemployment rate in the US ticked up to 4.4% from 4.3% in January while average hourly earnings were steady at 0.4% m/m. After a few indicators suggested the labour market was showing some stabilization, the February nonfarm payrolls casts doubts on those assumptions and will raise the prospect of the Fed needing to cut rates, even amid the expected inflationary passthrough caused by disruptions to energy shipments from the Middle East.

Elsewhere in the US, retail sales outperformed in control group sales in January, rising by 0.3% up from a decline of 0.1% a month earlier. Total nominal retail sales dropped by 0.2% m/m, dropping from December levels but marginally ahead of market expectations.

Today’s Economic Data and Events

11:00 GE industrial production y/y Jan: forecast -0.8%

19:00 US NY Fed 1yr inflation expectations Feb

Fixed Income

US Treasury markets rallied on the worse than expected jobs data for February though price action was choppy. Yields on the 2yr UST ended the day lower by slightly less than 2bps at 3.5605%, failing to unwind substantial moves higher from earlier in the week as markets focus more on the inflationary threats from energy caused by the war in the Middle East. Yields on the 10yr were more steady at 4.1383%.

Bond markets globally sold off on Friday with yields across Europe rising while Asian government bond yields also touched higher. In corporate credit, markets were lower at the end of the week including in GCC markets. Bloomberg’s region-wide USD-denominated index fell 0.3% on Friday.

FX

The major miss on February nonfarm payrolls turned currency markets against the dollar at the end of the week after several days of substantial gains. However, the move was relatively limited and concentrated in a few currencies. EURUSD rose by less than 0.1% to 1.1618 while GBPUSD added 0.4% to 1.3413. USDCHF showed the largest move among majors with CHF strengthening by 0.7% at 0.776. USDJPY edged up to 157.79.

But the moves have been short lived with major selling pressure against all FX majors as markets price in enormous uncertainty from the spillover of the war. As of early trading on 9 March 2026, EURUSD had dropped 0.9% to 1.1519 while USDJPY was up nearly 0.6% at 158.70. Moves across other currency markets were at similarly aggravated levels.

In emerging market currencies, the Indian rupee unwound some its previous gains with USDINR up 0.2% at 91.7513 while Turkish lira dropped about 0.1% at 44.0765. EGPUSD was flat.

Equities

Benchmark equity markets remained weak at the end of last week. The Dow Jones fell 0.9%, the S&P off by 1.3% and the NASDAQ lower by 1.6%. In Europe, declines were at a similar scale in the EuroStoxx and FTSE 100.

In the UAE, markets remained under pressure. The DFM fell 3.2% while the ADX was lower by 2%.

In Saudi Arabia the Tadawul closed higher by 2.1% at the start of its trading week overnight.

Commodities

After gains of 28% and 36% last week, both Brent and WTI futures have spiked even more in the early trading session of 9 March 2026. Brent has risen more than 27% to USD 117.92/b while WTI is up by almost 30% in a single session at USD 117.80/b. The duration of the spike will be contingent on how long shipments through the Strait of Hormuz are restricted and how long any shut-in oil production can get back to markets.

The US government has announced a UDS 20bn insurance plan to cover insurance costs for freighters transiting the Strait of Hormuz. In private insurance markets, there has been some movement to unlock insurance for shipping.