FINWIRES · TerminalLIVE
FINWIRES

US Oil Update: Futures Mixed as Traders Weigh Iran Retaliation Risks

By

Crude oil prices traded mixed in after-hours trading on Tuesday after Iran vowed retaliation for fresh US strikes on its territory, keeping investors on edge over supply disruptions via the Strait of Hormuz even as diplomatic efforts to ease tensions continue.

Front-month West Texas Intermediate crude futures slipped 3.14% to $93.57 per barrel, while Brent futures jumped 3.29% to $99.30/bbl.

Liquidity Energy strategists said volatility is expected to remain elevated as traders monitor military developments, shipping flows, and diplomatic negotiations across the region.

On Tuesday, Iran's Islamic Revolutionary Guard vowed to retaliate against "violations of the ceasefire" after it identified and engaged US drones and an F-35 jet fighter that entered the country's airspace.

US forces "conducted self-defense strikes in southern Iran" on Tuesday, targeting vessels allegedly trying to deploy mines, as well as missile launch locations. The US Central Command said the actions were intended "to protect our troops from threats posed by Iranian forces."

Saxo Bank strategists said crude prices rebounded after renewed US military activity in southern Iran and the Strait of Hormuz partially reversed Monday's sharp decline.

Iran's Foreign Ministry condemned the US attacks as a violation of a ceasefire that's been in place since early April, while Supreme Leader Mojtaba Khamenei said that the "nations and lands of the region will no longer be a shield for American bases."

"Without any doubt, the Islamic Republic of Iran will leave no act of aggression unanswered and will show not the slightest hesitation in defending the sovereignty and territorial integrity of Iran," the Foreign Ministry said in a statement.

On the supply front, the Hormuz, the strategic waterway through which 20% of the world's oil and liquefied natural gas flows during peacetime, remains effectively closed amid a double blockade by the US and Iran.

The US military has redirected 108 Iran-linked commercial vessels and disabled four others since imposing the blockade on April 13, US Centcom said on Tuesday.

Iran's Islamic Revolution Guards said on Tuesday that 25 commercial vessels, including oil tankers and container ships, safely transited the Hormuz over the past 24 hours.

Related Articles

Oil & Energy

QatarEnergy Extends Force Majeure Covering 17 LNG Cargoes, Edison Says

Milan-headquartered Edison said Monday that QatarEnergy extended its force majeure notice to cover five additional LNG cargoes scheduled for delivery between July and mid-August 2026.The expanded notice now covers 17 liquefied natural gas cargoes with a combined volume of about 2.2 billion cubic meters, the utility firm said.Edison said it has replaced nine of the 17 disrupted cargoes since QatarEnergy issued the first force majeure notice in early March 2026, covering roughly 1 Bcm of gas.The company said that mitigation measures and portfolio management activities will protect end customers from any supply impacts resulting from the disrupted deliveries.The latest liquefied natural gas shipments received from Qatar arrived at the end of March 2026, while Q1 gas deliveries totaled 1.6 Bcm.The company holds a long-term supply agreement signed in 2009 with QatarEnergy covering annual deliveries of 6.4 Bcm to Italy over 25 years.Qatar Energy did not immediately respond to' request for comment.

Oil & Energy

Dangote Refinery Holds Near-Record Runs as Crude Slate Shifts from US Barrels, Kpler Says

Nigeria's Dangote refinery maintained near-nameplate operations through April and May, running at about 600,000 barrels per day, while overhauling its crude sourcing mix and ramping product exports, Kpler strategists said in a Monday note.Kpler analysts said crude imports reached about 630,000 b/d in April and 609,000 b/d month-to-date in May, with domestic Nigerian grades accounting for the bulk of supply.Local crude intake surged to about 605,000 b/d in April, before easing slightly to 552,000 b/d so far in May, underscoring the refinery's growing reliance on domestic feedstock, the analysts said.The most notable shift in the crude slate was the complete disappearance of WTI Midland barrels in April, after they averaged over 200,000 b/d in February and March.The grade had previously served as the main non-domestic alternative. However, deteriorating Atlantic Basin economics, driven by higher freight rates, insurance, and voyage costs amid regional disruptions, eroded its competitiveness relative to Nigeria.In response, Dangote expanded sourcing across alternative grades, including Cameroon's Ebome, Guyana's Payara Gold and Libya's Sharara, with multiple 1-million-barrel cargoes arriving or scheduled between May and early June.On the product side, Kpler said the refinery posted record refined product exports of about 341,000 b/d in April, before easing to just under 250,000 b/d so far in May, as domestic deliveries absorbed a larger share of output.Jet fuel exports averaged about 90,000 b/d in April, with flows primarily to Northern Europe and the Mediterranean, while gasoline exports near 80,000 b/d were largely directed to West African markets, alongside a rare cargo shipment to Singapore.However, secondary unit performance has weighed on product slate optimization. Kpler said straight-run fuel oil exports more than doubled in May to above 80,000 b/d, up from 38,000 b/d in April, as the Residue Fluid Catalytic Cracker operated below its 204,000 b/d nameplate capacity since late April.However, despite the constraint, total runs are expected to remain in a 600,000 b/d to 650,000 b/d range, with strong domestic demand anchoring throughput. Domestic allocations have climbed to record levels above 250,000 b/d, with gasoline and diesel accounting for about 50% and 30%, respectively.Kpler said the refinery's ability to sustain elevated throughput while balancing feedstock diversification and shifting product flows is positioning it as a key marginal supplier of gasoline and jet fuel in Atlantic Basin markets.

Oil & Energy

China's Return to Oil Market Could Trigger Fresh Price Shock, Kpler Says

Weaker crude buying from China helped keep oil prices near $100 per barrel to $120/bbl despite an estimated 8 million barrels per day supply loss from the Middle East, Kpler said in a Monday note.The market avoided a deeper supply shock through inventory drawdowns, rerouted Middle Eastern exports, higher West of Suez shipments and lower refinery runs across Asia.Panic buying briefly pushed crude prices above $150/bbl during the early weeks of the US-Iran conflict before prices later stabilized.China's seaborne crude imports are set to fall to 6.78 million b/d, the lowest level in almost 10 years, down from 8.5 million b/d in April and a 2025 average of 10.66 million b/d, according to Kpler data.Refinery crude intake in China dropped to around 13.5 million b/d in May, down by 154,000 b/d over the month and nearly 1.92 million b/d below 2025 levels.Imports declined faster than refinery demand, pushing China's onshore crude inventories lower to around 1,232 million barrels from a record 1,251 million barrels in early May, Kpler data showed.State refiners, including Sinopec, plan to keep June and July refinery runs largely unchanged, even as seasonal summer fuel demand starts to increase from June onward.Weak economic activity and elevated fuel prices reduced oil consumption in China and raised concerns over softer summer demand, according to market participants cited by Kpler.Transportation fuel sales at state refiners missed targets again in May after weak April performance, while gasoline and diesel inventories remained near two-year highs, according to Kpler, citing Oilchem data.Refining margins improved to around negative $2/bbl from losses near negative $60/bbl in mid-April after refiners reduced purchases of expensive crude feedstocks, according to Oilchem assessments.Chinese refiners bought at least 30 million barrels of July-arrival crude cargoes in late April after spot premiums for West African and Latin American grades weakened.Hormuz supply disruptions limited crude options for Chinese refiners as Beijing maintained restrictions on Venezuelan crude purchases and kept 22.5% tariffs on US crude imports.Russian crude offered a cheaper alternative, but Chinese state refiners sharply reduced purchases after new US sanctions increased uncertainty around Eastern Siberia-Pacific Ocean, also known as ESPO, and Urals cargoes.Independent refiners also lowered spot buying as prices for Russian and Iranian crude climbed following temporary US sanctions waivers and tighter restrictions on Iranian shipping.Chinese independent refiners may cut refinery runs further if US restrictions on Iranian cargoes force them to compete with India for higher-priced Russian crude, potentially pushing Beijing to release reserves or boost crude buying.Chinese refiners also retained Omani cargoes in May, signaling expectations for tighter supplies ahead, while Kpler warned that renewed Chinese buying from July could drive oil prices sharply higher again.