Morning Highlights: Brent Back Above $100 as Iran Denies Talks, Launches Fresh Missiles at Israel; Valero Port Arthur Down, UN Resolution Deadlocked

Tuesday, March 24, 2026

Market Snapshot Brent

(May) $101.60 | WTI (May) $90.52 Brent +1.66 (+1.7%), WTI +2.39 (+2.7%), partially reversing Monday's 10%-plus collapse after Trump's power plant pause briefly sent prices below $100. Iran denies negotiations, launches fresh missile waves at Israel; Valero Port Arthur 380,000 bpd refinery shut after explosion; Saudi Aramco cuts Asian supply for second consecutive month.

Bottom Line

Monday's 10% drop was a relief rally built on a misreading or a deliberate misrepresentation of the diplomatic situation, and Tuesday's reversal is the correction. Iran's parliament speaker Mohammad Baqer Qalibaf calling Trump's talk of negotiations "fake news used to manipulate financial and oil markets" is not a rhetorical flourish, it is the most senior Iranian official with any reported connection to the talks flatly denying they occurred. The fact that Iran simultaneously launched fresh missile waves at Tel Aviv while Trump was speaking about major points of agreement tells you everything about where the two sides actually are. The five-day pause on energy infrastructure strikes is the one concrete thing Trump produced, and even that is narrowly scoped -- the Semafor report citing a U.S. official confirms strikes on military sites, naval assets, ballistic missile infrastructure and Iran's defense industrial base continue uninterrupted under Operation Epic Fury. Markets are not getting a ceasefire, they are getting a temporary suspension of one category of strike while everything else escalates. The Valero Port Arthur shutdown adds a domestic dimension that could not have come at a worse time. At 380,000 bpd, Port Arthur is one of the largest refineries in the United States and its diesel hydrotreater explosion hits the most stressed product in the market right now. Diesel and jet fuel are already at multi-year crack spread highs globally and U.S. Gulf Coast refining capacity going offline removes one of the few remaining sources of distillate relief for international markets. The UN Security Council drama is instructive for what it reveals about the diplomatic ceiling. Bahrain's Chapter Seven resolution authorizing force to reopen Hormuz has U.S. and Gulf Arab backing but faces certain Russian and Chinese vetoes. France's alternative text, which does not even mention Iran and explicitly conditions any escort operations on Iranian consent, tells you where the Europeans actually stand despite their joint statement last week. Macron refusing to participate in any immediate Hormuz operations until hostilities calm is functionally a veto on the coalition's operational utility in the near term. Saudi Aramco cutting Asian supply for a second consecutive month and running exports at 4.355 million bpd against a February rate of 7.108 million bpd is the starkest single data point on how comprehensively Gulf export capacity has collapsed. Yanbu is doing maximum work as the only available outlet and Sinopec loading 24 million barrels of Saudi crude from there in March tells you Chinese state refiners are pulling every available barrel they can find. Macquarie's $150 Brent scenario if Hormuz remains shut through end of April is no longer a tail risk framing -- it is a base case trajectory if the Islamabad talks this week produce nothing, and Iran's behavior today suggests they will not.

Top Developments

Iran Denies Talks, Launches Fresh Missiles at Israel

Iran's parliament speaker Mohammad Baqer Qalibaf, identified as the Iranian interlocutor in the reported negotiations, flatly denied any talks had taken place with the U.S., calling Trump's statements fake news designed to manipulate oil and financial markets. Iran's foreign ministry mentioned tension-reduction initiatives without confirming direct talks. Iran simultaneously launched fresh missile waves at Tel Aviv on Tuesday, with air raid sirens sounding across the city and an apartment building sustaining significant damage. Pakistan has offered Islamabad as a venue for direct talks this week, with JD Vance, Steve Witkoff and Jared Kushner reportedly expected to meet Iranian officials there, though no confirmation has come from either side.

Energy Infrastructure Strikes Paused Five Days, Military Operations Continue

Trump's five-day pause on attacks on Iranian energy sites is narrower than initial market reaction suggested. A U.S. official told Semafor that strikes on military sites, naval assets, ballistic missiles and Iran's defense industrial base continue under Operation Epic Fury without interruption. Israel was not party to the pause discussions. Israel separately conducted a large wave of strikes on central Tehran Monday, targeting IRGC intelligence facilities, the Intelligence Ministry and more than 50 ballistic missile storage and launch sites.

Valero Port Arthur Shut After Explosion and Fire

Valero shut its 380,000 bpd Port Arthur, Texas refinery Monday evening after an explosion and fire at a 47,000 bpd diesel hydrotreater unit, heard up to 11 miles away. Operations were halted to contain the fire, which burned for nearly five hours. The refinery also lost water and steam supplies during firefighting efforts. No injuries were reported. Port Arthur is one of the largest U.S. refineries and its diesel hydrotreater is precisely the unit most critical to distillate production. Losing this capacity while global diesel crack spreads are at multi-year highs removes one of the few remaining sources of international distillate relief.

UN Security Council Split on Hormuz Resolution

Bahrain circulated a Chapter Seven draft resolution authorizing countries to use "all necessary means" to protect commercial shipping in and around the Strait of Hormuz, backed by Gulf Arab states and the U.S. Russia and China are expected to veto it. France circulated a competing draft making no mention of Iran, not invoking Chapter Seven and conditioning any escort operations on Iranian consent and a return to diplomacy. Macron has explicitly refused to participate in immediate Hormuz operations. The split between the U.S.-Gulf text and the French alternative illustrates the coalition's operational limits even among nominally aligned parties. Three thousand U.S. Marines along with the USS Boxer and accompanying warships are deploying to the region.

Saudi Aramco Cuts Asian Supply for Second Consecutive Month

Saudi Aramco reduced crude supply to Asian term customers for April for the second month running, supplying only Arab Light crude exported via Yanbu as the Strait of Hormuz remains effectively closed. Saudi crude exports have fallen to 4.355 million bpd in March from 7.108 million bpd in February, per Kpler data. Yanbu loadings are running at record volumes with Sinopec loading roughly 24 million barrels of Saudi crude there in March alone. Yanbu was briefly disrupted last Thursday following the SAMREF drone strike, underlining the vulnerability of Saudi Arabia's only remaining export outlet.