West Texas Intermediate remains around the $91 a barrel mark, while Brent closed near $95 a barrel on Wednesday. Multiple reports suggest that Washington and Tehran are considering a two-week extension to allow more time to negotiate a deal. The White House, however, has denied that a formal request to extend the ceasefire has been made.
The focus for oil markets remains at the Strait of Hormuz with the US setting up a naval blockade to cut off Iranian traffic, while Iran sees this as a prelude to a breach of the ceasefire. The armed forces “will not permit any exports or imports to continue in the Persian Gulf, the Sea of Oman or the Red Sea” if the blockade continued, warned Ali Abdollahi, commander of Iran’s joint military headquarters.
Despite the fall from early-war highs of $120 a barrel, crude oil prices remain at elevated levels from when the war began.
“In the near term, I believe the market has realized that the panic buyers have left the space,” said Dennis Kissler, head of energy trading at Bok Financial Securities Inc. “In the end, it will all be about the peace agreement, and how safe the passage through the strait will be.”
In the US, crude stockpiles declined along with all major refined-product categories. Oil and fuel exports have jumped to a record as overseas buyers hunt for oil, particularly those based in Asia.
“What is interesting about these numbers are — that heading into summer driving season — we might be far from getting back to $3 in June,” said Carl Larry, oil and gas analyst at Enverus. Average retail nationwide gasoline prices were last at $4.11 a gallon, compared with less than $3 before the war.
(With Inputs From Agencies)
