June WTI crude oil prices rose by $0.83 (+0.88%) to $95.04 per barrel, while June RBOB gasoline increased by $0.0271 (+0.78%) on May 1, 2023. The price surge is attributed to heightened tensions between the US and Iran, primarily following Iran’s seizure of an oil tanker in the Strait of Hormuz, which was cited for “attempting to disrupt oil exports.” Markets are awaiting Iran’s response to a US proposal aimed at reopening the Strait of Hormuz and lifting the blockade on Iranian ports.
Energy prices are also influenced by a report indicating that the US plans to resume operations to guide commercial ships through the Strait of Hormuz with military support. Goldman Sachs estimates that disruptions in the region have cut crude output by approximately 14.5 million barrels per day (bpd), while the International Energy Agency indicates that about 13 million bpd of global oil supply has been affected. Currently, around 500 million barrels have been drawn down from global crude stockpiles, with the figure anticipated to reach one billion by June.
In the broader context, OPEC+ announced a production increase of 188,000 bpd for June, despite ongoing cuts due to regional instability. As of May 1, US crude oil inventories were reported to be 0.7% above the seasonal five-year average, while gasoline inventories were 3.1% below. The ongoing geopolitical tensions are likely to exert upward pressure on energy prices.
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