Oil Set for Second Weekly Drop

WTI crude oil futures surged more than 12% to above $112 per barrel on Thursday, the highest level since June 2022, after President Donald Trump signaled the Iran conflict could continue for weeks and warned of intensified US military action. His remarks, which included a pledge to strike Iran “extremely hard” over the coming weeks, raised fears of prolonged disruptions to global oil supply, particularly as no clear path to reopening the Strait of Hormuz was outlined. Markets reacted to the lack of any ceasefire or diplomatic signals, reinforcing concerns over tightening supply. Meanwhile, the UK is hosting a virtual meeting with around 40 countries to explore options for reopening the key shipping route, though the US is not expected to participate. OPEC+ is also considering a potential output increase, but any additional supply is unlikely to reach markets in the near term.

WTI crude oil futures jumped more than 9% on Thursday, approaching 2022-highs of $109 per barrel, as hopes for an imminent resolution to the Iran conflict dimmed. In his rare prime-time speech, President Donald Trump gave no clear end date for the Middle East conflict, saying the US has nearly met its strategic objectives in Iran while warning that military operations could intensify over the next two to three weeks. The statement raised the risk of more extensive damage to energy infrastructure throughout the Gulf. Meanwhile, Iran rejected Trump’s claim that it had sought a ceasefire, asserting that the Strait of Hormuz would remain closed and that the vital transit route is firmly under IRGC Navy control. Elsewhere, US crude inventories rose by 5.5 million barrels to 461.6 million last week, well above market forecasts.

WTI crude futures hovered near $98.82 per barrel on Thursday, extending their recent retreat as hopes of de-escalation in the Iran conflict, now in its fifth week, gained traction, with the White House facing growing pressure to ease tensions. President Trump said the US could halt military strikes within two to three weeks, while keeping the option for limited “spot” attacks. Earlier, Trump stated Iran had sought a ceasefire but stressed any deal would require Tehran to stop blocking the Strait of Hormuz, a claim Iran denied. Markets now await his national address for further clarity. Meanwhile, Fatih Birol of the International Energy Agency warned disruptions could intensify in April, with any prolonged closure of the Strait curbing flows and weighing on Europe. Elsewhere, US crude stocks jumped 5.5 million barrels to 461.6 million in the week ended March 27, far above forecasts and marking a sixth straight rise, highlighting ample supply.