Key facts
- Oil prices rose approximately 2% on Wednesday, with Brent futures settling at $97.81 a barrel and WTI crude climbing to $96.02.
- An effective deficit of around 5 million bpd is present due to structural supply disruption.
- Kuwait Petroleum Company estimates 6-8 weeks to restore 70% of normal output after Hormuz reopens.
- The EU is considering expanding its 'Operation Aspides' naval mission to include mine-clearing operations in the Strait of Hormuz.
- OPEC crude output fell to its lowest level in decades.
- Oil prices steadied Friday, with Brent near $95 and WTI near $93.
- Record U.S. crude exports of 5.6 million barrels per day were recorded in May.
- Qatar and the UAE are employing 'dark fleet' tactics for LNG shipments through the Strait of Hormuz.
- WTI crude futures have risen nearly 10% over three days as optimism for a swift peace deal diminishes.
- Commodity trader Trafigura reported a net profit of $4.1 billion for the six months ending March 31.
- Oil prices settled around 3% lower on Thursday, with Brent futures at $95.03 a barrel and WTI crude at $93.04.
- Companies will return an additional 40 million barrels to the U.S. Strategic Petroleum Reserve.
Oil prices are approaching $100 per barrel, with Brent futures settling at $97.81 and WTI crude at $96.02, driven by renewed Middle East hostilities and structural supply disruptions. Iranian missile launches and U.S. strikes have fueled concerns about potential supply disruptions, contributing to an effective deficit of around 5 million barrels per day. Commercial inventories and OPEC spare capacity are depleted, and supply restoration is expected to take months or years. OPEC crude output has fallen to its lowest level in decades, attributed to tightening U.S. naval blockades on Iran and disruptions in the Persian Gulf. The U.S. Strategic Petroleum Reserve (SPR) inventories have declined, though companies that borrowed crude will return an additional 40 million barrels as a premium after the conflict concludes, with the U.S. Energy Secretary expressing no concern about current SPR stock levels. U.S. commercial oil inventories are approaching critically low levels due to the ongoing conflict with Iran. The European Union is considering expanding its 'Operation Aspides' naval mission to include mine-clearing operations in the Strait of Hormuz, a proposal that requires unanimous backing from all 27 member states to secure the crucial shipping route. Kuwait Petroleum Company anticipates a lengthy recovery period for its oil production following the reopening of the Strait of Hormuz, estimating six to eight weeks to restore 70% of normal output and an additional month for the remaining 30%. Qatar and the UAE are employing 'dark fleet' tactics for LNG shipments, disabling transponders and offering double salaries to seafarers to navigate heightened geopolitical risks. Despite these tensions, oil prices have seen fluctuations, falling around 3% on hopes for a U.S.-Iran deal and a ceasefire, which raised expectations for the reopening of the Strait of Hormuz. However, optimism for a swift peace deal has diminished, leading to price rallies. Analysts note that while de-escalation headlines can reduce the war premium, significant price drops depend on Hormuz traffic recovery and on-the-ground progress. The U.S. has seen an increase in oil rigs for the seventh consecutive week, signaling a potential shift in the energy market. Most oil companies oppose implementing price caps at gas stations to address the energy shock from the Iran war. Commodity trader Trafigura reported a net profit of $4.1 billion for the six months ending March 31, more than doubling its earnings, citing volatile market conditions and geopolitical risks, including the Iran conflict, as key factors. Trafigura warned the oil market is at an 'inflection point'.