May WTI crude oil closed on April 3, 2023, at $0.54 above the previous day, marking a 0.48% increase, while May RBOB gasoline fell by $0.0030, or 0.09%. Concerns over potential escalation in the Iran conflict significantly influenced crude prices, as President Trump set a deadline for Iran to reopen the Strait of Hormuz by 8 PM that day. The Strait is crucial for global oil supply, typically facilitating about 20% of the world’s oil.
Saudi Arabia has granted the US military access to King Fahd Air Base, and the UAE is denying entry to Iranian nationals, increasing tensions in the region. The International Energy Agency (IEA) reported that over 40 energy sites across nine Middle Eastern countries are severely damaged, hindering oil production. Meanwhile, OPEC+ plans to increase output by 206,000 barrels per day in May, though regional instabilities may impede these efforts.
Floating storage levels have climbed, with around 290 million barrels of Russian and Iranian crude held on tankers—over 40% higher than the previous year. Gasoline inventories are anticipated to fall by 1.3 million barrels, while crude inventories are expected to rise by 500,000 barrels, based on the latest energy reports.
