WTI Firms as Supply Tightness Persists

WTI crude oil futures trimmed earlier losses and steadied around $102 per barrel on Wednesday, after a 7.6% 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.

WTI crude futures fell below $102 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 anticipated in April as surging energy prices linked to the Middle East crisis added to price pressures.

WTI crude oil futures jumped nearly 4% to around $102 per barrel on Tuesday, extending a 2.8% gain in the previous session, as concerns grew that disruptions in the Strait of Hormuz could persist. President Donald Trump said the US-Iran ceasefire was on “massive life support” after rejecting Tehran’s latest peace proposal, raising fears that the key shipping route may remain effectively closed for longer. Iran reportedly demanded an end to the US naval blockade and sanctions relief while seeking to maintain some control over traffic through Hormuz. Meanwhile, reports indicated Trump was preparing to meet with his national security team to consider renewed military action and discuss plans to escort commercial vessels through the strait. Saudi Aramco CEO Amin Nasser warned the market is losing about 100 million barrels of oil supply each week, adding that if disruptions continue, a return to normal market conditions may not occur until next year.