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Stocks Bounce as Oil Tumbles on Stockpile Hopes
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March 10, 2026
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March 10, 2026
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6:00Now PlayingAndreas Utermann, Chairman, Board of Directors at Vontobel, discusses his global macro outlook and opportunities for diversification amid Iran war risks.
Stocks bounced as oil tumbled after the Group of Seven nations asked their main energy agency to be ready to deploy oil reserves if needed, with the war in Iran posing threats to global supplies. Bonds and the dollar fell.
The S&P 500 wiped out losses as US crude tumbled to $85. The G-7 tasked the International Energy Agency with studying the volumes that could be released, according to France, which holds the current group presidency.
Meantime, the Pentagon said it’s conducting the most intense day of attacks against Iran and won’t give up until the Islamic Republic is defeated, striking a more aggressive tone after President Donald Trump’s suggestion the war could end soon.
Defense Secretary Pete Hegseth made the comments during a press conference Tuesday. They suggested the US-Israeli campaign that began on Feb. 28 may still have some way to run. Iran Foreign Minister Abbas Araghchi told PBS’s News Hour on Monday that talks with the US are not “on our agenda.”
“While traders welcomed the sudden drop in oil prices, the geopolitical backdrop remains far from stable, leaving markets vulnerable to further volatility,” said Fawad Razaqzada at Forex.com. “Against this backdrop, our near-term crude oil forecast remains cautious. We could yet see more volatility as Iran vows to fight.”
Addressing concerns about soaring energy prices, Trump said Monday that the US Navy will escort tankers to maintain a steady oil supply through the Strait of Hormuz. The effective closure of the waterway — vital to the world’s flow of petroleum — has created bottlenecks and caused regional energy giants to slash production. The US raised its forecast for domestic oil production next year after the recent surge in prices due to supply disruptions from key Middle East countries.
US crude output is now expected to grow by 220,000 barrels a day in 2027 to 13.83 million barrels a day, according to the Energy Information Administration’s Short-Term Energy Outlook released Tuesday.
The new forecast represents an increase of about 500,000 barrels from the agency’s previous projection made in February. That report showed US production was on course to peak this year and then decline in 2027.
“Because changes in oil prices take time to affect production—moving from investment decisions to rig deployment to well completion and first oil—the effect of higher prices in our forecast is more pronounced in 2027 than in 2026,” the EIA said in its latest report.
The US and Israel began strikes on Iran late last month, triggering widespread retaliatory attacks from Tehran and the effective closure of the Strait of Hormuz, a critical waterway that normally handles a fifth of global oil flows. Production cuts are rippling across the region as storage capacity fills up.
Shut-in oil production will likely peak in early April, mostly in Iraq with smaller volumes in Kuwait, the United Arab Emirates, and Saudi Arabia, the EIA estimated. It added that output will gradually recover as flows through the Strait resume.
US oil prices surged this week to nearly $120 a barrel before easing to trade near $84 a barrel. The rally has already pulled US retail gasoline prices to the highest levels since July 2024. The EIA raised its forecast for US retail gasoline prices to an average of $3.34 a gallon in 2026, up by 43 cents from its last projection.
The surge in oil prices triggered a wave of hedging by shale drillers seeking to lock in elevated prices for future sales. The move could allow producers to ramp up output even if prices decline in coming months.
The EIA increased its forecast for crude oil production in the Permian basin by 6% in 2027 as new pipeline capacity and price incentives support growth.
Diesel prices, which have surged worldwide since the war began, were projected to rise even further in the US, to $4.12 a gallon in 2026 from $3.43, the agency said.
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