Oil Plunges on 2-Week Ceasefire

Crude oil pulled back toward $91 per barrel on Thursday, paring gains from earlier in the session after the US military announced it had completed its latest strikes on Iran, raising hopes that peace negotiations could resume. The US earlier launched fresh attacks on Iran after President Donald Trump accused Tehran of delaying talks over an interim peace agreement. Iran also reportedly responded by targeting US vessels in the Strait of Hormuz with missile and drone attacks. The latest escalation reinforced the view that the April ceasefire has effectively unraveled, even though the large-scale bombing campaign seen at the outset of the conflict has not resumed. The near-total closure of the Strait of Hormuz continued to tighten global energy supplies, though there were signs that limited volumes of oil were still moving out of the Persian Gulf. Meanwhile, EIA data showed US crude inventories fell by 7.2 million barrels last week, extending their decline to a seventh straight week.

Crude oil climbed toward $92 per barrel on Thursday, extending gains from the previous session as the US military launched strikes against Iran for the second day, raising fears that peace efforts could collapse and the conflict disrupting global markets could drag on. President Donald Trump accused Tehran of stalling negotiations over an interim peace deal, while Tehran said it would stand firm against any threat. Earlier this week, the US launched what it described as “self-defense strikes” in response to the downing of an American helicopter, with Iran retaliating by targeting US military facilities in Bahrain, Jordan, and Kuwait. The near-total closure of the Strait of Hormuz continued to tighten global energy supplies, although there were indications that limited volumes of oil were still leaving the Persian Gulf. Meanwhile, EIA data showed US crude inventories dropped by 7.2 million barrels last week, marking a seventh consecutive weekly decline.

Crude oil extended gains and rose more than 2% to approach $91 a barrel on Wednesday as traders weighed escalating tensions in the Middle East. President Trump vowed to attack Iran very hard again and said that Iran had taken too long to negotiate a deal and would now “have to pay the price”. The comments follow Iranian attacks on several Gulf nations, including Bahrain, Jordan, and Kuwait, after US “self-defense strikes” in response to the downing of an American helicopter. Traffic through the Strait of Hormuz remains significantly disrupted, with Iran blocking most shipping through the key waterway, while the US has imposed its own restrictions on Iranian ports. However, US Energy Secretary Wright said vessel traffic in the Gulf and oil exports through the Strait are rising despite ongoing disruptions. Meanwhile, EIA data showed US crude inventories fell by 7.228 million barrels last week, a seventh consecutive weekly decline and surpassing expectations for a 4 million barrel draw.