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US Oil Update: Crude Rebounds After Trump's Bombing Threat

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Crude oil prices gained nearly 1% on Wednesday after US President Donald Trump unnerved traders with comments that the draft deal with Iran is not a final one and that bombing could resume if he is unhappy with progress.

Front-month West Texas Intermediate crude futures gained nearly 1% to $76.79 per barrel, while Brent futures added 1.2% to $79.89/bbl.

Trump reportedly stated that the memorandum of understanding with Tehran is not final, warning that he could resume a bombing campaign if Iran fails to comply or if the final terms are unsatisfactory.

"The US and Iran are expected to sign the agreement on an extended ceasefire in Switzerland on Friday. The Strait of Hormuz will be opened and Iran will be allowed to sell its oil from day one," SEB analysts said.

"However, the more challenging questions about Iran's nuclear enrichment program, missiles and Israel-Hezbollah are postponed," they added.

In its monthly report, the International Energy Agency adjusted its 2026 global demand contraction down by 700,000 barrels per day to a total contraction of 1.1 million bpd following a severe second-quarter plunge.

While the agency expects a sharp demand recovery in 2027, rebounding by 2 million bpd to average 105.3 million bpd, it warned of a massive supply overhang on the horizon.

Driven by the anticipated normalization of trade flows and the eventual execution of the US-Iran peace pact, global oil output is projected to surge by 8 million bpd by 2027 to reach 110.3 million bpd.

"June Hormuz flows are estimated at 5.1 mbd against 2.9 mbd in May but still only 25% of pre-war levels, flagging Iranian-labeled volumes as highly uncertain," J.P. Morgan analysts said.

The oil market now awaits US crude inventory data to better gauge the supply and demand picture.

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US Oil Update: Crude Falls After US-Iran Peace Deal Signals Supply Boost

Crude oil futures settled lower in after-hours trading on Tuesday, extending losses from the previous session, as investors weighed the prospect of increased Iranian crude exports and a gradual reopening of the Strait of Hormuz following a peace agreement between the US and Iran.Front-month West Texas Intermediate crude futures tumbled 5.1% to $76.62 per barrel, while Brent futures plunged by 4.4% to $79.48/bbl.Soojin Kim, research analyst at MUFG, said optimism about a gradual recovery in Gulf exports has reduced the geopolitical risk premium built up during the conflict.On Tuesday, President Trump said that he's open to sending details of the peace agreement with Iran to members of Congress, according to media reports, as US lawmakers from both parties raise questions, saying they should vote on any final deal.The preliminary deal would extend the US-Iran ceasefire for 60 days and create a framework for future negotiations over Tehran's nuclear program and other issues. Though the agreement's text has not been released, Trump has said he would unveil details on Friday.A senior US official, in an emailed response to, described the deal as "performance-based," noting that Iran can access the agreement's benefits only if it abides by its commitments.The conditions include not pursuing a nuclear weapon, neutralizing its enriched uranium and not interfering with traffic in the Strait of Hormuz, the official said.Though market participants have welcomed the prospect of increased crude flows via the Strait of Hormuz, RBC Capital Markets analysts said the operational challenges of reopening the Strait could take months to resolve.There are about 118 laden tankers trapped in strategic waterways, according to Kpler. However, though the vessels could leave within 10-15 days, Kpler analysts said they could deliver an early spike in transits without boosting regional production.Meanwhile, market participants are still grappling with whether the Strait has been mined, whether Iran retains de facto operational control, and how any transit tolls would be structured and collected.RBC Capital Markets analysts said the core MoU tentpoles remain unchanged from April and center on lifting the double blockade and reopening the Hormuz.On the supply front, the US will reportedly also allow Iran to immediately begin selling oil and fuel under the memorandum of understanding between the two sides, reached to end the conflict.

Oil & Energy

Iranian Oil Tankers Reposition Ahead of Potential Oil Export Resumption, Bloomberg Analysis Says

Iran-linked oil tankers have begun repositioning as Tehran moves closer to an agreement that could quickly reopen access to international oil markets, according to a Bloomberg analysis on Tuesday.Attention in the oil market has shifted to the potential return of Iranian barrels as traders assess the impact of any easing in US restrictions. About 68 million barrels of Iranian crude remain stranded under the blockade, according to a Kpler estimate cited by the analysis.Under a draft agreement nearing completion, Tehran could reportedly receive sanctions waivers that would allow oil exports to resume without delay once the deal is signed.Recent vessel-tracking data indicated that four ships resumed transmitting location signals and appeared to move through the Gulf of Oman and the Strait of Hormuz. Two of the vessels are supertankers with a capacity to transport about 2 million barrels of crude each, according to the analysis.Several tankers that had been anchored near Chabahar also left the area in recent days. The destination of at least three of those vessels could not be immediately determined, the analysis added, citing TankerTrackers.com.Monitoring Iran's tanker fleet remains challenging because vessels often disable tracking systems and are frequently affected by signal interference. Ongoing regional tensions have added another layer of complexity to vessel-tracking efforts, the analysis added.Iranian media reported that efforts to remove the US naval blockade, which has been in place since mid-April, have entered the implementation stage. The Iranian Students' News Agency cited the Deputy Foreign Minister as saying the process is already underway.Shipping restrictions forced a number of Iranian tankers to remain near Chabahar after access to key export routes became limited. Reports said US naval forces also confronted some vessels attempting to move through the blockade in recent weeks.After reactivating their tracking signals, two fuel carriers crossed the Strait of Hormuz, with one continuing through the Gulf of Oman and another indicating a destination near Oman.The analysis said Washington and Tehran are expected to sign an agreement on Friday that would end both Iran's blockade of the Strait of Hormuz and the US blockade of Iranian shipping.

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Update: Market Chatter: US Intel Assessments Say Iran Gains Ability to Control Strait of Hormuz

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