WTI crude oil prices fell by 1.60% to $1.62 per barrel today, while RBOB gasoline dropped 2.46%. The decline follows President Trump’s announcement that the U.S. may end its conflict with Iran within two to three weeks, assuming Iran seeks a ceasefire and the Strait of Hormuz is “open, free and clear.” The latest EIA report revealed a significant increase in U.S. crude inventories, which rose by 5.45 million barrels to a 2.75-year high, surpassing expectations of 2 million barrels.
The Strait of Hormuz, a crucial shipping lane for global oil (handling about 20% of the world’s supply), remains largely closed, contributing to an estimated 6% production cut among Persian Gulf oil producers. Current U.S. crude oil production stands at 13.657 million barrels per day, with the number of active U.S. oil rigs recently decreasing to 409, just above a 4.25-year low.
Additionally, the International Energy Agency highlighted that over 40 energy sites in the Middle East have suffered severe damage, potentially prolonging supply chain disruptions. Signs of geopolitical tension, including U.S. military access to Saudi Arabia’s King Fahd Air Base and restrictions on Iranian entry to the UAE, further support energy price stability amid ongoing uncertainty in the region.
