-- Crude oil futures edged lower in midday trading on Thursday on reports that President Donald Trump would be briefed on expanded military options in Iran amid a deepening standoff between the US and Iran.
Front-month West Texas Intermediate crude futures tumbled by 2.27% to $104.37 per barrel, while Brent futures dropped by 3.51% to $113.88/bbl.
US crude exports surged last week as global buyers turned to American producers for alternative supplies amid the ongoing Middle East supply disruptions. The latest data from the Energy Information Administration shows that US crude stockpiles dropped by 6.2 million barrels to 459.5 mmbbls in the week ended April 24.
"This is a record high, surpassing the previous record of 5.63m b/d in February 2023," ING strategists said in a note Thursday, noting that these strong export volumes are increasingly tightening up the US domestic market.
The inventories are now about 1% above the five-year average for this time of year, the EIA said.
President Trump is reviewing new military options while maintaining a strict naval blockade on Iranian ports, signaling a hardline stance amid stalled negotiations.
The US President is reportedly set to receive a briefing from the head of US Central Command, Admiral Brad Cooper, on plans for a series of new military strikes on Iran to force it to negotiate a deal to end the conflict.
Iranian authorities, meanwhile, have vowed to respond with "long and painful strikes" on US positions if Washington renewed attacks, while reasserting control over the Strait of Hormuz.
Iran Revolutionary Guards said that any new US military aggression would trigger previously undisclosed Iranian capabilities, including advanced smart targeting systems.
"You have seen the fate of your bases in the region; you will also see the fate of your warships", IRGC Aerospace Force Commander Majid Mousavi was quoted as saying.
Iran's Supreme Leader, Mojtaba Khamenei, also said that Tehran would eliminate what he described as the enemy's abuse of the waterway under the new management of the strait, as his country moves to assert its control over the key chokepoint.
On the supply front, the global oil market is undergoing a fragile rebalancing nearly two months after disruptions in the Hormuz slashed crude flows, with limited system flexibility keeping supplies tight.
Data analytics firm Kpler said about 60 days into the disruption, oil flows through the key chokepoint remain close to minimal levels, falling from about 20 million barrels per day to about 1 million b/d in April.
Traffic through the Hormuz remains limited and uneven, with crossings continuing to show a sharp directional imbalance, according to Kpler. As of April 29, a total of 12 vessel crossings were recorded, up by four day-on-day, with all ships moving west-to-east and no return traffic observed.