Oil Markets and Automotive Sector Face Continued Disruption Amid Gulf Conflict 

Oil prices recovered on Tuesday after Iran denied holding negotiations with Washington, contradicting a statement by President Donald Trump that the two sides had reached points of agreement. Brent crude was trading at approximately $102 per barrel in Asia, and US West Texas Intermediate at around $90.62, following a decline of more than 10% on Monday after Trump announced a five-day pause on planned strikes against Iranian power plants, per Reuters.

Tim Waterer, chief market analyst at KCM Trade, told Reuters that shelving the strike plan had removed much of the war premium from the oil price, while noting that the Strait of Hormuz remains constrained. Analysts at Macquarie have indicated Brent could reach $150 if the Strait remains effectively closed through April. IEA Executive Director Fatih Birol confirmed the agency is in consultation with Asian and European governments on further releases from strategic reserves.

Saudi Supply Constraints

Reuters reported that Saudi Aramco has reduced crude supply to Asian buyers for a second consecutive month. The producer is currently shipping only Arab Light crude from the Red Sea port of Yanbu, following the loss of access to the Gulf terminal at Ras Tanura. Data from analytics firm Kpler cited by Reuters shows Saudi export volumes fell from 7.1 million barrels per day in February to approximately 4.4 million barrels per day in March.

India's Strategic Reserve Position

In a parliamentary reply dated 23 March, the Indian government disclosed that strategic petroleum reserves stand at approximately 3.372 million tonnes of crude, representing 64% of total storage capacity — equivalent to roughly 9.5 days of consumption, according to Economic Times. By comparison, Japan and South Korea hold reserves covering more than 250 and 200 days respectively.

Following a temporary US sanctions waiver on Iranian and Russian oil already at sea, Iranian crude has been offered to Indian refiners at a premium of $6–$8 per barrel over ICE Brent, per Reuters. India has not received Iranian crude since May 2019. The waiver applies to oil loaded before 20 March and discharged by 19 April. Iran's exclusion from the SWIFT payment system remains an unresolved obstacle for Indian refiners considering purchases.

Automotive Sector Impact

S&P Global Mobility scenario analysis, as reported across industry sources, indicates a conflict of fewer than three months would be the least disruptive outcome, with recovery possible within the year. A prolonged conflict is projected to lead OEMs to prioritise higher-margin vehicles over entry-level models, a pattern observed during the semiconductor shortage of 2021–2022.

Toyota has reduced planned Middle East production by approximately 40,000 vehicles. Shipping costs have risen under fuel price inflation and war-risk insurance increases. Volkswagen Passenger Car Sales Chief Martin Sander was quoted at a London industry event on 12 March stating that customer sentiment is declining in several markets, adding to existing consumer uncertainty.