Brent Pares Losses as Supply Tightness Persists

Brent crude oil futures trimmed earlier losses and steadied around $108 per barrel on Wednesday, after a 7.5% rally over the previous three sessions. The move followed the International Energy Agency’s warning that global observed oil inventories fell at a record pace of around 4 million barrels per day in March and April. The IEA said in its Oil Market Report that with inventories already drawing sharply, further volatility is likely ahead of the peak summer demand season, and that the market could remain severely undersupplied until October even if the conflict ends sooner. Middle East tensions continue to disrupt flows, with Asian refiners including Japan seeking alternatives to Persian Gulf supplies. Meanwhile, reports suggest Iranian export shipments have recently stalled, marking the first sustained interruption since the conflict started. US President Donald Trump said the situation remains under control, downplaying concerns ahead of talks with China’s Xi Jinping.

Brent crude futures fell below $107 per barrel on Wednesday, snapping a three-day rally, although the prolonged conflict in the Middle East and the continued near-closure of the crucial Strait of Hormuz squeezed global energy supplies. Efforts to broker an end to the US-Iran war have yet to produce meaningful progress, while the fragile ceasefire remained at risk after Washington dismissed Tehran’s latest response to a proposed peace framework. Hormuz continues to face restrictions from both US and Iranian forces, remaining a major obstacle in negotiations and disrupting substantial flows of crude, natural gas, and fuels. Meanwhile, President Donald Trump is expected to meet Chinese President Xi Jinping this week, though Trump indicated that trade negotiations would take precedence over developments surrounding the Iran conflict. Separately, US inflation accelerated more than expected in April as surging energy prices linked to the Middle East crisis added to price pressures.

Brent crude futures climbed above $107 per barrel on Tuesday, extending gains from the previous session, as President Donald Trump said the US-Iran ceasefire was on “massive life support” after dismissing Tehran’s latest peace proposal, fueling concerns that the Strait of Hormuz may stay effectively closed for an extended period. Iran reportedly called for the US to end its naval blockade and ease sanctions while seeking to retain some authority over traffic through the key shipping route. Meanwhile, reports suggested President Trump is set to meet with his national security team to weigh a potential return to military operations, alongside renewed discussions about escorting commercial vessels through Hormuz. Saudi Aramco CEO Amin Nasser warned that the market is losing roughly 100 million barrels of supply each week, adding that prolonged disruptions could push any market normalization into next year.