Oil & Iran War Context Weekly (W15)

Key Takeaways

• Crude prices fell $14/bbl after Iran ceasefire, biggest weekly drop
• Brent prompt futures at $97/bbl, Dated Brent spot near $130
• Backwardated curves persist; prompt spreads cut roughly half after ceasefire
• US Gulf Coast crude inventories high; drawdown as tankers shift to Hormuz
• Middle‑distillate shortages tighten diesel, gasoil, jet fuel markets despite ceasefire

Pulse Analysis

The announcement of a ceasefire in the Iran‑Israel conflict sent crude prices tumbling, with front‑month WTI and Brent futures shedding more than $14 per barrel – the steepest weekly slide since the war began. Prompt Brent settled near $97 per barrel, while spot Dated Brent lingered around $130 after briefly touching $144.46, a new historical high. Although the backwardation on the curve narrowed by roughly half, the market remains deeply inverted, reflecting traders’ appetite for any inventory releases that could ease supply pressure.

U.S. crude stocks have swelled, especially along the Gulf Coast, creating a buffer that is now poised to be drawn down as empty tankers redeploy to serve Hormuz‑starved importers. European (ARA) and Singapore inventories have already shown sizable draws, signaling tightening physical availability outside the United States. The convergence of high U.S. stockpiles with declining overseas buffers could intensify freight rates and accelerate the movement of American barrels toward the Red Sea corridor, a dynamic that may further support spot price resilience despite the recent pullback.

Refined‑product markets are already feeling the strain, with diesel, gasoil and jet fuel experiencing the sharpest shortages, while gasoline remains relatively ample. Crack spreads have narrowed following the ceasefire, yet the underlying demand‑supply gap in middle‑distillates keeps margins under pressure. Meanwhile, speculators turned net sellers this week, likely liquidating excess long positions after the price shock, which could temper volatility in the short term. Analysts will watch whether the ceasefire holds, as any resumption of hostilities could quickly reverse the modest inventory drawdowns and reignite backwardated pricing.