Oil steadied after a choppy session in which traders parsed conflicting headlines on efforts to end the US-Iran war. West Texas Intermediate traded near $98 a barrel, while Brent closed below $109 on Tuesday after swinging across a range of more than $6.
Talks aimed at ending the conflict are continuing, but reports that an agreement is close are inaccurate, according to a diplomat involved in negotiations. An earlier unconfirmed report had knocked oil off five-month highs, with Brent at one point falling as much as 3.3% before paring losses. US President Donald Trump said he has to make a final decision about which way he wants to win, referring to the war.
Brent has surged almost 80% this year as widening conflicts in the Middle East and between Russia and Ukraine disrupt energy supplies, with refined products climbing even more sharply. Renewed attacks on tankers and energy infrastructure are keeping geopolitical risk elevated even as Persian Gulf flows recover to near pre-war levels. "This conflict doesn't feel like it's coming to a quick conclusion," said Dan Pickering, chief investment officer at Pickering Energy Partners. Traders "are settling in for a higher-priced environment."
Risks have intensified in the Strait of Hormuz, where a supertanker hit a sea mine, Iran's state-run IRIB News said. Iran's strikes are increasingly hitting ships' engine rooms, causing more severe damage. Still, US Energy Secretary Chris Wright told Fox News that shipments had recovered to 80% of their prewar level, though refined-product movements remain constrained. Goldman Sachs analysts including Daan Struyven and Samantha Dart estimated Gulf refined products exports at 40% of last year's average. The American Petroleum Institute reported US crude inventories fell by 4.9 million barrels last week; if confirmed by official data on Wednesday, it would mark a third weekly decline.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing