Oil Steadies as Focus Remains on Ukraine Talks

WTI crude futures settled at $99.60 per barrel on Wednesday as growing optimism for a resolution to the conflict with Iran pulled prices lower to start the new month. President Donald Trump suggested US military forces could leave the region within two or three weeks while confirming that Iran’s president has requested a ceasefire. Despite these gains, the White House maintained a firm stance noting that a ceasefire would only be considered once the Strait of Hormuz is open and secure for global shipping. Elsewhere, commercial crude stocks surged by 5.5 million barrels to 461.6 million in the week ended March 27 which far exceeded analyst expectations and marked the sixth consecutive weekly increase. This domestic surplus was driven by a drop in refinery utilization to 92.1% and a decrease in crude runs of 219,000 barrels per day. The strategic waterway remains a critical focus for energy markets after oil funds saw record trading volumes in March.

WTI crude futures were lower at around $100.7 per barrel at the start of April, though they pared most of their earlier losses as hopes for a swift de-escalation of the conflict with Iran began to fade. US President Donald Trump said Iran is seeking a ceasefire and that Washington would consider one once the Strait of Hormuz is open, free, and secure, adding that until then, the US is blasting Iran into oblivion. Earlier, the President had suggested the US could end its military involvement within two to three weeks, a comment that briefly pushed oil prices down to as low as $96.5 per barrel. In reality, however, the Strait of Hormuz remains largely closed, with attacks continuing across the Gulf. Around 25% of global seaborne oil trade transits through the Strait, with roughly 80% of those flows destined for Asian markets. In March, oil prices surged more than 50%, marking their largest monthly gain since May 2020 and reaching their highest levels since 2022.

WTI crude oil futures slid more than 2.5% below $99 per barrel in the first trading session of April, following a record monthly jump in March, weighed by hopes of de-escalation in the Middle East. President Trump told reporters that US forces could withdraw from Iran within two to three weeks and suggested a deal with Tehran might be possible, though not necessary to end the conflict. However, markets remained cautious as additional US troops arrived in the region, while Tehran said no formal peace talks were underway but signaled a willingness to end the war if its conditions are met. All eyes are now on Trump’s nationwide address on the Iran conflict later today. Meanwhile, Iranian drones struck fuel tanks at Kuwait International Airport, triggering a large fire and causing damage, adding to recent attacks on energy infrastructure. Elsewhere, API data showed US crude inventories surged by 10.263 million barrels last week.