May WTI crude oil (CLK26) on Monday closed up +2.51 (+2.60%), and May RBOB gasoline (RBK26) closed up +0.0787 (+2.59%). Crude oil and gasoline prices settled sharply higher on Monday after peace talks between the US and Iran broke down over the weekend and President Trump imposed a blockade in the Strait of Hormuz. Crude prices rallied on Monday when President Trump said the US began a full naval blockade of the Strait of Hormuz and threatened to attack any Iranian vessels that approach US ships in the strait. The blockade could exacerbate global oil and fuel shortages. Iran said it would target all ports in the Persian Gulf if its own shipping hubs were threatened.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 more than half of their advance on Monday when President Trump said that Iran still wanted to make a deal and reached out to the US over peace negotiations as the US began a naval blockade of the Strait of Hormuz. The International Energy Agency (IEA) said Monday that about 13 million bpd of global oil supply has been shuttered by the Iran war and the closure of the Strait of Hormuz. The IEA also said that more than 80 energy facilities have been damaged during the conflict, and a recovery could take as long as two years. Persian Gulf oil producers have been forced to cut production by roughly 6% due to the closure of the Strait of Hormuz as local storage facilities reach capacity. The US vowed to blockade all vessels passing through the Strait of Hormuz today that call at Iranian ports or are headed there. The blockade could exacerbate global oil and fuel shortages, as about a fifth of the world’s oil and liquefied natural gas transits through the strait. Iran has been able to export crude during the war, as it exported about 1.7 million bpd in March. Crude prices also have support after Saudi Arabia’s state producer, Saudi Aramco, raised the price of its main oil grade to Asia last week by $17 a barrel for May delivery, the biggest jump on record. In a bearish factor for crude, OPEC+ on April 5 said it will boost its crude output by 206,000 bpd in May, 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 another 827,000 bpd left to restore. OPEC’s March crude production fell by -7.56 million bpd to a 35-year low of 22.05 million bpd. Vortexa reported Monday that crude oil stored on tankers that have been stationary for at least 7 days fell -35% w/w to 89.13 million bbl in the week ended April 10, a 5-month low. 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 eight 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. Last Wednesday’s EIA report showed that (1) US crude oil inventories as of April 3 were +1.5% above the seasonal 5-year average, (2) gasoline inventories were +3.6% above the seasonal 5-year average, and (3) distillate inventories were -4.2% below the 5-year seasonal average. US crude oil production in the week ending April 3 fell -0.4% w/w to 13.596 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 April 10 was unchanged at 411 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.
May WTI crude oil (CLK26) on Monday closed up +2.51 (+2.60%), and May RBOB gasoline (RBK26) closed up +0.0787 (+2.59%). Crude oil and gasoline prices settled sharply higher on Monday after peace talks between the US and Iran broke down over the weekend and President Trump imposed…
See this event through different lenses
Compare how Western, Iranian, Israeli, Global South, and Pro-Peace perspectives frame this event.
Compare PerspectivesLoading notes...
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.