Global stock markets advanced for a third consecutive session amid ongoing uncertainty, as investors looked beyond recent geopolitical tensions. Oil prices declined due to a larger-than-expected increase in U.S. crude inventories and Iraq's establishment of an alternative export route, temporarily easing the worst-case supply concerns.

On the 18th, South Korea's KOSPI index surpassed the 5900-point mark, rising over 4.6% intraday. The country's financial regulator stated it would expand a 100 trillion won market stabilization plan if necessary. The MSCI World Index gained 0.3%, marking its longest winning streak in over a month. Memory chip stocks, such as Samsung Electronics, which are considered relatively less affected by Middle East conflicts, performed notably well. U.S. and European stock index futures also climbed, indicating the upward trend could extend to more markets.

In oil markets, Brent crude fell approximately 2.3%, trading near $101 per barrel. Data from the American Petroleum Institute (API) showed U.S. crude inventories increased by 6.56 million barrels for the week ending March 13, far exceeding the Reuters poll expectation of 380,000 barrels. Concurrently, Iraq signed an agreement to resume crude exports via Turkey, bypassing the Strait of Hormuz, which further pressured oil prices.

The retreat in oil prices supported a rise in U.S. Treasury prices, with the yield on the 10-year note falling 2 basis points to 4.18%. Gold declined 0.4% to below $5,000 per ounce. Market focus is set to shift to the Federal Reserve's interest rate decision later on Wednesday, with particular attention on the wording used by Chair Jerome Powell during his press conference.

South Korea's KOSPI index broke through 5900 points, gaining over 4.6% on the day. S&P 500 futures rose 0.4%. Euro Stoxx 50 futures advanced 0.7%. The U.S. dollar index edged down 0.06% on Wednesday. The Japanese yen appreciated 0.2% to 158.74 per dollar. U.S. Treasuries advanced, with the 10-year yield dropping 2 basis points to 4.18%. Brent crude fell about 2.3%, trading near $101 per barrel. WTI crude declined 3.37% to $92. Gold decreased 0.4% to below $5,000 per ounce. Bitcoin fell 0.7% to $74,025.23.

**Oil Prices Under Pressure from Inventory Build and Alternative Exports**

The short-term decline in oil prices resulted from multiple factors. According to Reuters, API data indicated a weekly U.S. crude stockpile increase that significantly surpassed expectations, dampening market sentiment. Meanwhile, the U.S. military's use of bunker bombs to destroy Iranian missile sites near the Strait of Hormuz led oil analyst Andy Lipow to comment, "This has brought some optimism to the market, suggesting that the day tankers can safely return to these waters may be approaching."

The alternative export agreement between Iraq and Turkey provides a new pathway for global oil supply to bypass the Strait of Hormuz, further mitigating some supply disruption risks.

However, supply-side disruption risks have not disappeared. Recent attacks on energy infrastructure in the UAE have occurred successively, including a drone strike on the world's largest ultra-sour gas facility, a fire in the Fujairah oil industrial zone, and damage to a tanker near the Strait of Hormuz. The Shah gas field remains shut due to a fire caused by a drone attack. The field, operated by Abu Dhabi National Oil Company in partnership with Occidental Petroleum, has a daily capacity of over 1.28 billion standard cubic feet.

Citigroup warned that while the oil market faces near-term downward pressure, upside risks cannot be ignored. The bank's base case suggests that disruptions through the Strait of Hormuz could reach 11 to 16 million barrels per day over the next four to six weeks, potentially pushing Brent crude to $110-$120 per barrel.

Brent crude fell about 2.3%, trading near $101 per barrel. WTI crude dropped 3.37% to $92.

**Fed Decision Becomes Next Market Focus**

As geopolitical tensions and inflation expectations continue to intertwine, market attention is turning to the Federal Reserve's interest rate decision on Wednesday. Although markets widely expect rates to remain unchanged, the wording used by Chair Powell during his press conference will be a critical signal—investors are eager to understand how the Fed might respond if the conflict creates opposing pressures on the labor market and inflation targets.

Bond traders have been gradually scaling back aggressive bets against rate cuts this year, but expectations for the timing and path of cuts remain highly divided. IG Australia market analyst Tony Sycamore noted in a report, "If the conflict continues to drive up energy prices and thereby inflation, it will strengthen expectations for a stronger U.S. dollar and further limit the Fed's room for easing."

The U.S. dollar index dipped 0.06% on Wednesday. Bloomberg macro strategist Brendan Fagan pointed out that the temporary stabilization in oil prices has provided some support for Treasuries, but until price pressures show sustained easing, market direction remains more driven by geopolitics than by monetary policy itself.

**Analysts: Volatility Likely to Persist Until Energy Situation Stabilizes**

While overall market sentiment has improved, strategists widely caution that high volatility is unlikely to dissipate until energy markets truly stabilize. Veteran strategist Louis Navellier stated that the U.S. stock market's ability to rise despite higher oil prices mainly reflects robust expectations for corporate earnings and economic growth. However, he emphasized, "Investors should expect market volatility to persist until the energy situation stabilizes."

Invesco strategist David Chao reminded investors that historical data shows it takes "an average of about four to five months" for oil prices and stock markets to recover from supply-side shocks. This implies that even if the current situation eases somewhat, it will take time for markets to fully digest the impact.