May WTI crude oil (CLK26) on Tuesday closed down -1.50 (-1.46%), and May RBOB gasoline (RBK26) closed down -0.0559 (-1.71%). Crude oil and gasoline prices gave up an early advance on Tuesday and settled sharply lower on hopes that the war in Iran is near an end. Crude prices initially rallied sharply to a 3-week high on Tuesday after President Trump said he is willing to end the US military campaign against Iran even if the Strait of Hormuz remains closed. Also, the action by Iran on Tuesday to strike a fully laden Kuwaiti oil tanker off Dubai with a drone supported oil prices.Don’t Miss a Day: From crude oil to coffee, sign up free for Barchart’s best-in-class commodity analysis. However, crude prices gave up their gains and turned lower Tuesday afternoon after Iran signaled openness to resolving the war. Iranian President Masoud Pezeskhian said his country had the "necessary will to end this war," provided that hostilities end on all fronts, and the recognition of Iran's sovereignty over the Strait of Hormuz. On Tuesday, President Trump said he is thinking of ending the war in Iran even if the Strait of Hormuz remains closed. Mr. Trump believes the US should achieve its main goals of hobbling Iran's navy and its missile stocks and wind down hostilities while pressuring Iran diplomatically to reopen the Strait. If that fails, the US would press allies in Europe and the Gulf to take the lead on reopening the waterway. The Strait of Hormuz remains essentially closed, limiting global oil supplies and boosting crude prices. Persian Gulf oil producers have been forced to cut production by roughly 6% as local storage facilities reach capacity. The Strait of Hormuz normally handles a fifth of the world's oil. Concerns that the Iran war could widen throughout the Middle East are also bullish for crude prices. Saudi Arabia agreed to give the US military access to King Fahd Air Base, and the UAE closed an Iranian-owned hospital and club. Iran's Middle Eastern neighbors are growing frustrated with Iran, which has responded to US and Israeli attacks by hitting targets in several nearby nations. Energy prices remain supported after the International Energy Agency said last Monday that more than 40 energy sites across nine countries in the Middle East have been "severely or very severely" damaged, potentially prolonging disruptions to global supply chains once the war in Iran ends. In a bearish factor for crude, OPEC+ on March 1 said it will boost its crude output by 206,000 bpd in April, above estimates of 137,000 bpd, although that production hike now seems unlikely given that Middle East producers are being forced to cut production due to the Middle East war. OPEC+ is trying to restore all of the 2.2 million bpd production cut it made in early 2024, but still has nearly another 1.0 million bpd left to restore. OPEC's February crude production rose by +640,000 bpd to a 3.25-year high of 29.52 million bpd. Mounting crude supplies in floating storage are a bearish factor for oil prices. According to Vortexa data, about 290 million bbl of Russian and Iranian crude are currently in floating storage on tankers, more than 40% higher than a year ago, due to blockades and sanctions on Russian and Iranian crude. Vortexa reported on Monday that crude oil stored on tankers that have been stationary for at least 7 days rose by +47% w/w to 136.13 million bbl in the week ended March 27. On February 10, the EIA raised its 2026 US crude production estimate to 13.60 million bpd from 13.59 million bpd last month, and raised its US 2026 energy consumption estimate to 96.00 (quadrillion btu) from 95.37 last month. The IEA last month cut its 2026 global crude surplus estimate to 3.7 million bpd from last month's estimate of 3.815 million bpd. The most recent US-brokered meeting in Geneva to end the war between Russia and Ukraine ended early as Ukrainian President Zelenskiy accused Russia of dragging out the war. Russia has said the "territorial issue" remains unresolved with Ukraine, and there's "no hope of achieving a long-term settlement" to the war until Russia's demand for territory in Ukraine is accepted. The outlook for the Russia-Ukraine war to continue will keep restrictions on Russian crude in place and is bullish for oil prices. Ukrainian drone and missile attacks have targeted at least 28 Russian refineries over the past seven months, limiting Russia's crude oil export capabilities and reducing global oil supplies. Also, since the end of November, Ukraine has ramped up attacks on Russian tankers, with at least six tankers attacked by drones and missiles in the Baltic Sea. In addition, new US and EU sanctions on Russian oil companies, infrastructure, and tankers have curbed Russian oil exports. The consensus is that Wednesday's weekly EIA crude inventories rose by +2.0 million bbl, and gasoline supplies fell by -2.37 million bbl. Last Wednesday's EIA report showed that (1) US crude oil inventories as of March 20 were +0.6% above the seasonal 5-year average, (2) gasoline inventories were +3.3% above the seasonal 5-year average, and (3) distillate inventories were -0.6% below the 5-year seasonal average. US crude oil production in the week ending March 20 was down by -0.1% at 13.657 million bpd, mildly below the record high of 13.862 million bpd posted in the week of November 7. Baker Hughes reported last Friday that the number of active US oil rigs in the week ended March 27 fell by -5 to 409 rigs, just above the 4.25-year low of 406 rigs posted in the week ended December 19. Over the past 2.5 years, the number of US oil rigs has fallen sharply from the 5.5-year high of 627 rigs reported in December 2022. On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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A tanker identified as the Kaifan was struck by an unknown projectile northeast of Oman’s Limah in the Strait of Hormuz, according to a July 21 report from UK Maritime Trade Operations. No ships were observed transiting the strait that day. Attribution of the strike and links to prior incidents have not been confirmed by the vessel’s owner.
Goldman Sachs has projected Brent crude averaging $80 per barrel in the fourth quarter and $75 in the following year, conditional on reduced Middle East tensions, while noting upside risks from potential shipping disruptions in the Strait of Hormuz or Red Sea.
Brent prices rose above $91 per barrel amid recent U.S.-Iran exchanges and Houthi threats to Saudi shipments before edging lower on Tuesday. A senior Iranian official told Reuters that mediators had proposed a 10-day ceasefire to preserve an interim agreement.
Opening summary: Iran claims attacks on strait of Hormuz ships amid fresh US strikes Welcome to our live coverage of the latest developments in the Middle East crisis. Iran attacked a tanker in the strait of Hormuz early on Tuesday, forcing its crew to abandon the ship, as Yemen’s Iran-backed Houthis announced they were imposing an immediate maritime blockade of Saudi Arabia in the Red Sea after the two sides traded fire last week for the first time in years.
A Houthi official said the Bab al-Mandeb strait – at the southern end of the Red Sea, through which about 12% of the world’s trade usually passes – would be closed to the Saudis in response to the kingdom’s “unjust blockade on Yemenis for over 10 years”.
Saudi Arabia said it would take “all necessary measures to protect its vessels in accordance with international law”. A 10 consecutive night of US airstrikes has not compelled Tehran to loosen its grip on the strait of Hormuz, a vital route for global energy supplies.
But even as Iran’s president said the country had returned “full-scale war”, the Iranian interior minister travelled to Pakistan – a key mediator in the conflict – for talks. In key developments: The latest US strikes came hours after Donald Trump said Iran would pay “many times over” for killing US soldiers after multiple service members were killed in action over the weekend.
A tanker came under attack early Tuesday in the Hormuz strait off Oman, forcing the crew to abandon the vessel, the British military’s United Kingdom Maritime Trade Operations centre said. Iran’s Revolutionary Guards claimed the attack as well as two other attacks on ships in the waterway on Monday.
The US military’s Central Command said its latest airstrikes were to “degrade” Iran’s ability to attack commercial shipping in the strait and included hitting military command centres and missile and drone launch sites. Iranian media reported strikes in parts of the country including Bandar Abbas, Tabriz and Bushehr, home to the country’s only operational civilian nuclear power.
Iran’s launched attacks in response against Bahrain, Kuwait and Jordan, which all host US forces. Oil prices softened after hitting their highest levels in more than a month in the previous session. Brent crude futures eased 0.4% to $88.87 a barrel by 0052 GMT on Tuesday while US West Texas Intermediate crude for September delivery was steady at $82.
47 a barrel. Democrats have seized on the deaths of three US troops killed in Iranian strikes to urge Trump to urgently reverse his resumption of the war with Iran amid widespread anxiety over climbing casualties. The Lebanese army began taking charge of security in three southern villages, the US said, as a deal to secure an Israeli withdrawal from southern Lebanon and the disarmament of Hezbollah faced its first test on the ground.
US forces struck the tanker Settebello in the Gulf of Oman on June 10, killing three Indian crew members when munitions hit the engine room and adjacent areas. Maritime tracking data indicate the vessel had transported Iranian oil under US sanctions for several years and conducted offshore transfers prior to the strike.
The US military described the action as a precision operation, while reports note the ship was stationary at the time.