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US Oil Update: Crude Rallies on Strait of Hormuz Attacks, US Fuel Stock Draws

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Crude oil futures advanced in midday trading on Wednesday, buoyed by reports of gunfire attacks on container vessels in the Strait of Hormuz and a sharper-than-expected decline in US fuel inventories.

Front-month West Texas Intermediate crude futures jumped by 3.57% to $92.87 per barrel, while Brent futures rose 3.22% to $101.65/bbl.

US crude stockpiles rose by 1.9 million barrels to 465.7 mmbbls in the week ended April 17, the Energy Information Administration said in its weekly report on Wednesday. Crude inventories are now about 3% above the five-year average for this time of year, the EIA said.

The agency said that US gasoline stocks fell by 4.6 mmbbls to 228.4 million barrels and distillate stockpiles by 3.4 mmbbls to 108.1 mmbbls.

"Higher oil and fuel prices have already triggered around 5 million b/d of demand destruction," Saxo Bank strategists said, citing Vitol.

The analysts said that market stress remains evident in the refined products space, where shortages of diesel, jet fuel, and petrochemical feedstocks continue to underpin prices.

The US and Iran remain deadlocked on several key issues, including Tehran's nuclear capabilities and Israel's war with Hezbollah in Lebanon.

Soojin Kim, a research analyst at MUFG, said that with key disputes unresolved, including nuclear concerns and regional conflicts, the oil market remains highly sensitive to geopolitical developments and is supported by ongoing supply disruptions.

Iran's Revolutionary Guards said its naval forces stopped two ships attempting to cross the Hormuz on Wednesday and directed them to Iranian territorial waters. MarineTraffic said the two vessels are both operated by MSC.

The attacks come days after US forces stopped and boarded a sanctioned oil tanker, after seizing a cargo ship over the weekend, and said it has directed 29 vessels to return to port as Washington steps up its campaign to disrupt Iran's shipping network.

The UK Maritime Trade Operations said that at least three vessels were targeted by gunfire in the Strait, as the Revolutionary Guards warned that any disruption to order and safety in the strategic waterway would be considered a "red line."

Meanwhile, Trump said in a social media post that if the US lifted its blockade to open the Strait, there could never be a deal with Iran.

The US President said that a ceasefire would stay in effect until a "seriously fractured" Iranian leadership can come up with a unified proposal for a permanent resolution. However, Iran has accused the US of breaching its commitments under a 10-point framework that it offered at the start of a fragile ceasefire.

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US Oil Update: Crude Rises as Trump Extends Iran Ceasefire Amid Hormuz Blockade

Crude oil futures settled higher in after-hours trading on Tuesday after President Trump extended the ceasefire with Iran, though he maintained a naval blockade of the Strait of Hormuz and Tehran's ports.Front-month West Texas Intermediate crude futures climbed by 3.20% to $90.22 per barrel, while Brent futures rose 3.90% to $99.14/bbl.Hours before a two-week ceasefire with Iran was set to expire on Wednesday, Trump said in a social media post that he was extending the truce at the request of Pakistani mediators. Iranian officials did not immediately respond to the announcement.Trump said that a ceasefire would stay in effect until the Iranian leadership could come up with a proposal for a permanent resolution.Calling the Iranian government "seriously fractured," Trump said he made the decision at the request of Field Marshal Asim Munir, and Prime Minister Shehbaz Sharif of Pakistan."... we have been asked to hold our attack on the country of Iran until such time as their leaders and representatives can come up with a unified proposal," Trump said in a social media post on Tuesday.However, the US President said that the US would hold off on fresh attacks on Iran but that a naval blockade of the Hormuz would continue until "discussions are concluded, one way or the other."Dan-Bunkering strategists said in a note on Tuesday that the crude market has been heavily driven by news flow, and this is expected to remain the case in the coming week.Iran has alleged that the US breached its commitments under a 10-point framework that Iran offered at the start of a fragile ceasefire.On Tuesday, Iran's Foreign Minister Abbas Araqchi said the US blockade of Iranian ports was an "act of war" and thus a violation of the ceasefire."Blockading Iranian ports is an act of war and thus a violation of the ceasefire," Araqchi said in a social-media post on X. "Striking a commercial vessel and taking its crew hostage is an even greater violation."The Department of War, previously the Department of Defense, said on Tuesday that the US forces stopped and boarded a sanctioned oil tanker in its campaign to disrupt Iran's shipping network."US forces have boarded the crude oil tanker Tifani in the Indian Ocean, in what appears to be a further escalation in enforcement against Iran-linked shipping," MarineTraffic said in a social media post on X.Kpler strategists said daily transits via the Strait increased modestly, though activity remains well below normal levels."Commercial movements are still constrained by heightened security risks, including three new attacks over the past four days and persistent uncertainty over sea mine clearance," the analysts said.

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Hormuz Disruptions Deepen as Oil Prices Rebound and Recovery Timelines Slip, Wood Mackenzie Says

Strait of Hormuz flows remain sharply constrained, with vessel traffic far below normal 170 daily levels and energy markets reacting to ongoing disruption, Wood Mackenzie said Tuesday.Wood Mackenzie said the waterway remains effectively restricted despite ceasefire signals, with uncertainty over safe passage continuing to deter shipping activity.Although the US and Iran are moving toward renewed talks, both sides remain far apart on terms, raising the risk of prolonged disruption to Gulf energy exports.A two-week ceasefire announced on April 7 and a subsequent 10-day pause in Lebanon had briefly lifted optimism around easing tensions, Wood Mackenzie added.However, two Indian vessels were forced to turn back over the weekend after coming under fire while attempting to transit the strait, underscoring ongoing risks.Iran's Islamic Revolutionary Guard Corps warned ships against moving in the Persian Gulf and the Sea of Oman, saying, "approaching the Strait of Hormuz will be considered co-operation with the enemy."Traffic had risen modestly after the ceasefire, with about 20 vessels transiting daily, but this remains far below the roughly 170 ships seen in February, according to Wood Mackenzie.That limited recovery has reversed, with minimal vessel movement recorded on Sunday, signaling continued disruption across oil, gas, and chemicals markets.Oil prices initially fell after the ceasefire, with Brent dropping about 14% from around $110 to below $95 per barrel, and later reaching just above $86, according to the report.Prices rebounded, with Brent June futures rising about 5% to around $95 per barrel, while European gas prices climbed to 61.5 euros ($72.21) per megawatt hour before easing to 40 euros.The United States has tightened its blockade, seizing a cargo vessel and increasing pressure on Iran-linked shipping, while both sides exchanged sharper rhetoric over the weekend, Wood Mackenzie said.Tasnim, a media outlet affiliated with Iran's Islamic Revolutionary Guard Corps, identified several locations that could "enter the conflict zone" if hostilities resume, including the Bab al Mandeb Strait.It also named Saudi Aramco assets and key oil terminals in Yanbu and Fujairah, which serve as alternative routes bypassing the Strait of Hormuz, Wood Mackenzie added.Wood Mackenzie said a peace deal could allow some tankers to resume movement quickly, but full restoration of normal traffic through the Strait of Hormuz may take until the end of June, citing Alan Gelder, senior vice president.Liquefied natural gas exports could see an initial surge after a peace deal, but a full return to normal operations would take longer, Wood Mackenzie said.Massimo Di Odoardo at Wood Mackenzie said restarting Qatar's LNG output could take three to four weeks for the South complex, while recovery of northern facilities would require a longer timeframe.Rising tensions between the United States and Iran have cast doubt on recovery timelines, with prolonged disruption in the Strait of Hormuz threatening deeper imbalances in global energy markets, Wood Mackenzie said.Brent crude has averaged about $85 per barrel in 2026, warning that prices near $90 could push global growth below 2% and into recession territory, said Peter Martin at Wood Mackenzie.

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Trump Extends Ceasefire on Iran, US Blockade Remains in Force

US President Donald Trump said Tuesday he has extended the ceasefire with Iran while maintaining a blockade, delaying planned military action as negotiations remain uncertain.Trump said in a Truth Social post, "... upon the request of Field Marshal Asim Munir, and Prime Minister Shehbaz Sharif, of Pakistan, we have been asked to hold our Attack on the Country of Iran until such time as their leaders and representatives can come up with a unified proposal."Trump said the US blockade would be maintained, signaling continued pressure, and also indicated that talks remain conditional on Iran presenting a clear negotiating position."I have therefore directed our military to continue the blockade and, in all other respects, remain ready and able, and will therefore extend the ceasefire until such time as their proposal is submitted, and discussions are concluded, one way or the other," Trump said.The current two-week ceasefire, which started on April 7, is set to expire on Wednesday, with both sides previously expected to participate in a second round of negotiations in Islamabad.However, uncertainty persists, as Pakistan's Information Minister, Attaullah Tarar, said confirmation from Iran of sending a delegation to the talks is still awaited. Iran's officials have repeatedly said it will not attend the talks.On Tuesday, US Vice President J D Vance's planned visit to Pakistan for renewed negotiations was put on hold, according to multiple media reports.