Key facts
- Oil futures are trading near $95-$100 per barrel due to geopolitical tensions and supply concerns.
- Brent crude futures surpassed $95 a barrel.
- WTI crude futures reached a high of $94.00 and a midweek peak of $97.00.
- Disruptions in the Strait of Hormuz are constraining shipments and supporting copper prices.
- Gasoline stocks are at their lowest level since 2014.
- U.S. crude exports reached a record 5.6 million barrels per day in May.
- Hopes for a U.S.-Iran deal and a ceasefire led to oil price drops.
- Norway averted a potential offshore strike after a wage deal was reached.
- Australia's Dorado oil project may reach a final investment decision in late 2027.
- Companies will return 40 million barrels to the U.S. Strategic Petroleum Reserve.
- U.S. oil rigs increased for the seventh consecutive week.
Oil futures have been volatile, trading in a range between approximately $90 and $100 per barrel, influenced by a complex interplay of geopolitical tensions, supply disruptions, and economic data. Brent crude futures for August delivery have surpassed $95 a barrel, with WTI crude futures reaching highs of $94.00 and even a midweek peak of $97.00 before easing. These price movements are largely driven by events in the Middle East, including strikes involving the United States and Iran, and disruptions in the Strait of Hormuz, which have tightened physical markets and led to significant inventory draws. Gasoline stocks are at their lowest level since 2014, and U.S. crude inventories continue to fall, with Cushing nearing tank bottoms. Commercial inventories and OPEC spare capacity are depleted, with supply restoration expected to take months or years, creating an effective deficit of around 5 million barrels per day. Record U.S. crude exports of 5.6 million barrels per day in May have also contributed to price surges. However, periods of price decline have occurred, notably when hopes for a U.S.-Iran deal and a ceasefire between Israel and Lebanon emerged, leading to expectations of the Strait of Hormuz reopening. Analysts predict that crude oil prices could fall to $85 per barrel and gasoline prices to $4 per gallon if a peace deal with Iran is reached. Conversely, former President Trump's announcement that Israel will not deploy troops to Beirut caused oil futures to trim gains. Geopolitical shifts have also led to a partial recovery in tanker traffic, stabilizing at an estimated 60-70% of pre-war levels, though Iranian exports have reportedly decreased by approximately 90%. In other energy markets, European natural gas prices have decreased despite concerns about winter supply due to low storage levels and limited Russian pipeline gas. Norway has averted a potential offshore strike after wage talks between the Norwegian Oil and Gas Association and the Industri Energi union reached an agreement, preventing disruptions at Western Europe's top oil and gas producer. Australia's largest undeveloped oil project, Dorado, could reach a final investment decision in late 2027, with Carnarvon Energy Ltd believing the ongoing energy crisis increases the urgency for domestic resources. Companies that borrowed crude oil from the U.S. Strategic Petroleum Reserve will return an additional 40 million barrels as a premium after the conflict in Iran concludes, with U.S. Energy Secretary Chris Wright expressing no concern about current SPR stock levels. Copper prices have received support due to disruptions in the Strait of Hormuz, which are constraining shipments, and have climbed nearing $14,000 a ton, while aluminum prices have reached their highest point in over four years. Gold prices are declining, pressured by higher interest rates and a stronger U.S. dollar, despite ongoing Middle East tensions. U.S. oil rigs have increased for the seventh consecutive week, the longest streak since 2022, signaling potential shifts in the energy market.