Morning Highlights: Brent at $115, Heading for Record Monthly Gain of 60%; Houthis Open Red Sea Front, Saudi Yanbu at Full Capacity, Trump Eyes Iranian Oil Seizure

Monday, March 30, 2026 | 6:15 AM ET

Market Snapshot

Brent (May) $115.19 | WTI (May) $101.51 Brent +2.62 (+2.3%), WTI +1.87 (+1.9%). Brent up 60% in March, steepest monthly gain in LSEG records back to 1988, exceeding the 1990 Gulf War. WTI up 52% for its biggest monthly gain since May 2020. Houthis launch first Red Sea attacks of the war; Saudi East-West pipeline at full 7 million bpd capacity; Trump tells FT he wants to seize Iranian oil and take Kharg Island; South Korea weighs nationwide driving curbs.

Bottom Line

Brent's 60% monthly gain is the single most important data point this morning - it exceeds the 1990 Gulf War spike in LSEG records going back to 1988, and the conflict that produced it is now entering its second month with no credible off-ramp in sight. The Houthi attacks opening a Red Sea and Bab el-Mandeb front is the development that changes the geographic calculus most significantly. Saudi Arabia has rerouted 4.658 million bpd through Yanbu on the Red Sea, with the East-West pipeline now running at full 7 million bpd capacity - and that entire alternative routing now sits in the potential firing line. JP Morgan's Natasha Kaneva framed it correctly: the conflict is no longer concentrated in the Persian Gulf and around Hormuz, it now extends into the Red Sea and Bab el-Mandeb, one of the world's most critical chokepoints. If Yanbu is disrupted, Saudi crude pivots to the SUMED pipeline to the Mediterranean -- a far more constrained outlet that cannot handle 5 million bpd of crude plus 700,000 to 900,000 bpd of products. The Saudi rerouting has been the single most important supply-side adaptation of the entire war, and it is now exposed. Trump's Financial Times interview is the most strategically revealing statement of the conflict. Saying his favorite option is to take Iran's oil the way the U.S. took Venezuela's, confirming Kharg Island is actively on the table and adding "it would mean we had to be there for a while" signals that the administration is thinking beyond a military operation toward a prolonged occupation scenario that would restructure Iranian oil flows under U.S. control. The gap between that ambition and the diplomatic track -- where Trump simultaneously describes Iran's new leaders as very reasonable and says he is pretty sure a deal gets done -- is not a contradiction in Trump's framing, it is a pressure strategy. But markets cannot price both outcomes simultaneously, which is why Vandana Hari's read is the correct one: the market has all but discounted a negotiated end and is bracing for sharp escalation. Vanda's framing is consistent with SEB's observation that Trump's April 6 deadline has had no reassuring effect and the market is demanding concrete de-escalation, not rhetoric. South Korea considering nationwide driving curbs at $120 to $130 Brent -- the first since the 1991 Gulf War - and Vietnam's Binh Son actively sourcing ESPO, Sokol and African crude for its 130,000 bpd refinery illustrate how broadly the supply scramble has spread across Asia. The EU facing no immediate supply shortages but tightening diesel and jet fuel markets is the European version of the same story: crude buffers are holding for now but product markets are already stressed. With April 6 now one week away, the Kharg Island decision, the Hormuz escort force timeline and whether Pakistan's Islamabad channel produces anything substantive are the three variables that will define whether Macquarie's $200 scenario or a rapid post-war normalization becomes the dominant market narrative heading into Q2.

Top Developments

Houthis Open Red Sea Front, Bab el-Mandeb Now at Risk

Yemeni Houthis launched their first attacks on Israel of the war Monday, with the Israeli military confirming multiple Iranian missile waves and a Yemeni attack -- only the second from Yemen since the conflict began. JP Morgan analysts warned the conflict has now extended beyond the Persian Gulf into the Red Sea and Bab el-Mandeb, threatening the alternative routing that Saudi Arabia has built through Yanbu. Oman's Salalah terminal was also damaged over the weekend despite ceasefire talks. If Yanbu exports are disrupted, JP Morgan identified the SUMED pipeline to the Mediterranean as the only remaining Saudi export alternative, a far more constrained outlet that cannot absorb current Yanbu volumes.

Saudi East-West Pipeline at Full Capacity, Yanbu Exports at 5 Million bpd

Saudi Arabia's East-West pipeline is running at its full capacity of 7 million bpd, Bloomberg reported Saturday, with Yanbu crude exports reaching approximately 5 million bpd and oil product exports adding 700,000 to 900,000 bpd on top. Aramco CEO Amin Nasser had flagged the pipeline would reach full capacity in mid-March. The rerouting represents the most significant supply adaptation of the war -- and the Houthi Red Sea attacks now put that entire alternative corridor under direct threat for the first time.

Trump Eyes Iranian Oil Seizure, Calls Kharg Island Takeover Easy

Trump told the Financial Times on Sunday that his preferred outcome is seizing Iranian oil the way the U.S. took Venezuelan assets, saying Kharg Island could be taken "very easily" and that an occupation would mean being there "for a while." The U.S. has already struck up to 90 targets on Kharg Island without hitting oil infrastructure, per Trump's own statements. He simultaneously described Iran's new leadership as very reasonable and expressed confidence a deal would be reached -- framing military seizure and negotiation as parallel rather than mutually exclusive options. Iran said Monday it is ready to respond to a U.S. ground attack, accusing Washington of preparing a land assault even while seeking talks.

Israel Strikes Tehran Infrastructure, Iran Launches Fresh Waves

The Israeli military said Monday it was attacking Iranian government infrastructure throughout Tehran, including command centers and facilities associated with IRGC intelligence. Iran launched multiple missile waves at Israel in response. The escalation continues despite Trump's April 6 energy infrastructure pause, which applies only to U.S. strikes on Iranian energy sites and does not constrain Israeli operations or Iranian retaliation. SEB Research noted the April 6 deadline has had no reassuring effect on markets, which are now demanding concrete de-escalation rather than extended deadlines.

South Korea Weighs Nationwide Driving Curbs, Asia Demand Destruction Accelerates

South Korea's Finance Minister Koo Yun-cheol said the government could expand mandatory driving restrictions from the public sector to the general population if Brent reaches $120 to $130, which would mark the country's first nationwide driving curbs since the 1991 Gulf War. South Korea imports roughly 70% of its crude from the Middle East. The government already imposed a five-day public sector vehicle rotation system last week. Vietnam's Binh Son refinery is sourcing ESPO, Sokol and African crude as replacement feedstock and plans to run at 123% of designed capacity in Q2. The EU faces no immediate crude shortage but acknowledged tightening diesel and jet fuel markets in an internal briefing document Monday.

Pakistan Diplomacy Active, Direct Talks Still Unconfirmed

Pakistan's Foreign Minister Ishaq Dar said weekend discussions covered possible paths to an early and permanent end to the war and potential direct U.S.-Iran talks in Islamabad. Trump confirmed the U.S. and Iran have been meeting directly and indirectly and described Iran's new leaders as very reasonable -- statements Iran has not confirmed and its military command has continued to contradict. The 15-point U.S. proposal remains on the table with Iran having called it one-sided and unfair. No confirmed direct talks have taken place despite a week of Pakistani facilitation efforts.