Oil eased in a choppy session as traders weighed progress on diplomatic efforts to resume shipping through the Strait of Hormuz against fresh risks of a global supply squeeze.
Brent slipped to settle below $88 a barrel after fluctuating between losses and gains. West Texas Intermediate was little changed at around $82, as Oman and Iran pushed for a wider deal on the management of the Strait of Hormuz. The Islamic Republic’s military said the two sides had reached a revenue-sharing agreement on the crucial waterway, though Tehran has repeatedly said a deal on navigation would not equate to an immediate re-opening.
Prices pushed higher during the session after Russian President Vladimir Putin was said to be planning an escalation in Ukraine, having concluded that negotiations for a peace deal had reached a dead end. The development sparked concerns about a a fresh threat to global energy supplies should the fighting intensify. Recent Ukrainian strikes on refineries and ports have squeezed the fuel market and prevented Moscow from diverting crude into exports, further tightening markets already disrupted by the fallout from the Iran war.
Diesel has been particularly impacted, and futures in New York settled higher, more than doubling already this year. Meantime, US data showed domestic supplies of diesel have fallen to the lowest seasonal level ever, threatening to push prices even higher just as heating and agricultural seasons start. Europe has been particularly impacted by the crunch, as buyers draw on imports from Mexico for the first time in seven years.
Still, barrels of crude appear to be flowing from the Persian Gulf even as relatively little refined fuel products make their way out. US President Donald Trump claimed that 10 million barrels of oil had exited Hormuz Tuesday, bolstering hopes that shipments through the critical waterway could be increasing after months of disruption.
Satellite imagery appeared to also show Saudi Arabia’s oil loadings inside the Persian Gulf rising, the latest sign that the kingdom is finding workarounds to move barrels as Yemen’s Houthi militants threaten its Red Sea exports.
“The oil market continues to be leaning towards more supplies moving through the Strait of Hormuz,” said Dennis Kissler, senior vice president for trading at BOK Financial Securities Inc. “However with no guaranteed timeline in place yet for further openings a lot of traders have been moving to the sidelines.”
Yet even as millions of barrels a day of crude are escaping through Hormuz, attacks on shipping continue and risks remain. US allies are privately warning that the strait is still likely mined, casting doubt on Trump’s claim that the US Navy has completely removed and detonated explosives laid by Iran.
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With assistance from Nicholas Lua.
This article was generated from an automated news agency feed without modifications to text.
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