16 March 2026 | Weekly Snapshot
Saward Dawson > Wealth Advisory Insights > Weekly Snapshot > 16 March 2026
Did you know?
Prior to the conflict in Iran, Australia’s strategic oil reserves were approx. 27 days of consumption. This is somewhat low compared to other countries, such as Japan (200 days), the USA (80 days), China (60 days) and the UK (47 days). In context of the current Iran conflict, this would be an opportunity for Australia to rethink our energy policy around domestic security, including oil exploration and downstream oil refining.
Market Movements
The Australian market held up pretty well last week, up 0.2% led by financials (up 1.7%) and resources (up 0.4%). Lynas (up 20.5%, large ex-China rare earth’s producer) and IAG (up 12.1%, insurance) were two such examples. Northern star (down 14%, large domestic gold producer) fell heavily after production downgrades and cost increases.
Overseas, India was the worst performing market (down 3.9%), reflecting both low energy independence and only 10 days of oil reserves. Japan, in contrast, has 230 days of oil reserves and their stock market was higher by 1.7%. In the USA, the S&P500 was lower by 2.4% with only energy (up 2.5%) and defensive-utilities (up 0.9%) higher. Occidental Petroleum rose 5.2%. Airline stocks were heavily sold including United Airlines (down 8.4%).
Oil prices were the lead indicator to the above with WTI oil higher by 4.2% to $103. Conflicts have historically corresponded with higher gold prices, but this was not the case last week with gold falling 0.8% to $5,052, reflecting the use of gold to fund rising energy costs.
Our RBA meets tomorrow with a 25-bps rate hike to 4.10% now widely expected. The case for another hike has strengthened with headline inflation at 3.8% (well above the 2-3% target). The oil price is adding significant inflationary pressure.
The US Federal Reserve meets tomorrow and is expected to hold rates steady in the 3.50-3.75% range but expectations for any interest rate cuts have now been pushed back due to the surge in energy prices.
Iran and Portfolio update:
With the US taking control of Kharg Island, from where 90% of Iran’s oil is loaded and Iran still limiting safe passage through the Strait of Hormuz, the conflict has both escalated and stalled at the same time. Both assets (Kharg Island and the Hormuz Strait) go hand-in-glove, and you can’t use one without the other. Iran’s new supreme leader Mojtaba Khamenei has publicly stated the Hormuz closure will continue as a pressure tool. Trump has called for the support of allied warships to reopen the strait.
In terms of the portfolio approach, we continue to hold the view that the conflict in Iran could be painful but temporary. How painful and how short lived is a fluid proposition and ultimately requires guesswork depending on supply chains and the extent of regional participation. When investors extend their timeframe, however, there are higher probabilities in taking a view that this war will pass, oil trade will resume, supply chains will reopen and markets will normalise.
It is also a good reminder why we build our portfolios they way we do: buy the best companies who are able to sail through the good, the bad and the ugly of markets, because sometimes strong cross-currents will unexpectedly redirect market traffic.
Portfolio Movements
Auziron and BHP have the most operating exposure to rising oil prices
- Whilst the higher oil prices will be a benefit for our oil holdings (Woodside, Santos, Shell), we ran some analysis across our ASX holdings to investigate which of our companies consume the most oil as part of their day-to-day operations and hence, might see an operating headwind.
- The results showed that Auziron and BHP were the most exposed, with 13% and 11% (respectively) of their operating costs relating to Diesel prices.
- This analysis will help navigate the volatility in determining both upside impacts for oil suppliers and downside cost impacts for oil consumers.
Orica provides positive first half trading update, launches $100 million cost reduction program
- Orica provided a positive first half business update, revealing that strong FY25 momentum has continued into FY26 with group EBIT expected to be slightly higher than the prior corresponding period.
- Digital Solutions EBIT is expected to grow around 20% on the prior corresponding period while Specialty Mining Chemicals EBIT is expected to increase approximately 15%, underpinned by robust gold and copper markets. Blasting Solutions EBIT may be slightly lower, affected by the rising AUD and reduced Indonesian coal quotas.
- The company also announced a new cost reduction program targeting at least $100 million in annualised savings over three years and the $500 million on-market buyback is also nearing completion
- Orica is a leading global mining and infrastructure solutions provider
Woodside commences drilling at Trion, a major milestone for the $7.2 billion Gulf of Mexico project
- Woodside Energy, in partnership with PEMEX, has commenced the drilling campaign at the Trion Field in the ultra-deepwater Gulf of Mexico. The project received Final Investment Decision in 2023 but with other development projects (Sangomar, Scarborough, Louisiana LNG) taking priority until now. The $7.2 billion Trion project is one the largest in Mexico and includes 24 subsea wells connecting to a floating production unit with capacity of approximately 100,000 barrels per day.
- Acting CEO Liz Westcott noted the drilling start represents a milestone for the Trion project and for Mexico’s deepwater oil and gas sector.
- The project remains on track for first oil in 2028 and is expected to generate more than US$10 billion in taxes and royalties to Mexico over its life.
The Week Ahead
- Monday 16 March: China Industrial Production (Jan-Feb combined) — consensus ~5.3% YoY (prior 6.2%),China Retail Sales (Jan-Feb combined) — consensus ~4.0% YoY (prior 3.7%).
- Tuesday 17 March: Australia RBA Interest Rate Decision with markets now expecting a 0.25% hike with Oil at ~$100/bbl injecting a fresh inflationary impulse.
- Wednesday 18 March: USA Fed FOMC Interest Rate Decision and Summary of Economic Projections (dot plot). Fed funds rate currently at 3.50–3.75% after three consecutive cuts in late 2025. Markets overwhelmingly expect another hold. Trump continues to publicly demand immediate rate cuts. USA PPI (Feb) — consensus ~0.3% MoM
- Thursday 19 March: Australia unemployment expected around 4.1% (prior 4.1%).
- Iran conflict context for the week: The US-Israeli war on Iran (launched February 28) enters its third week with the Strait of Hormuz effectively closed. Oil above $100/bbl for the first time since 2022.
Saward Dawson Wealth Advisors Pty Ltd, a Corporate Authorised Representative of Akambo Pty Ltd t/a Accountants Private Advice
The information presented in this publication is general information only, and is not intended to be financial product advice. It has not been prepared taking into account your investment objectives, financial situation or needs, and should not be used as the basis for making an investment decision. Before making any investment decision you need to consider (with your financial adviser) your particular investment needs, objectives and financial circumstances.
Some numerical figures in this publication have been subject to rounding adjustments. Akambo Pty Ltd (including any of its directors, officers or employees) will not accept liability for any loss or damage as a result of any reliance on this information. The market commentary reflect Akambo Pty Ltd’s views and beliefs at the time of preparation, which are subject to change without notice.
