Stocks of crude oil in the U.S. Strategic Petroleum Reserve fell to 340.3 million barrels, the lowest level since 1983, according to data from the Department of Energy.
Oil prices fell sharply on Monday as Iran and U.S. appeared poised to end their four-month war. Commodity strategists say oil price volatility will persist as energy markets grapple with a challenging recovery process.
A strong start to the week could be in store for financial markets after the U.S. and Iran reached a peace deal over the weekend.
The world is guzzling so much oil from commercial and strategic inventories that they risk falling below their minimum operating levels.
Brent crude oil futures may fall to around $80 per barrel by year-end if Strait of Hormuz isn't closed again, CBA said.
The U.S. has reached a peace deal with Iran, both President Donald Trump and Pakistani mediators said Sunday evening, with the president also announcing in a post on Truth Social an end to the U.S. blockade of the Strait of Hormuz, saying “Let the oil flow!”
President Donald Trump said Sunday that the U.S. has agreed to a peace deal with Iran, ending months of hostilities that shut the Strait of Hormuz and sent the global economy into an oil shock.
Executive insights from CVX confirm that the floating shadow inventory used to mask the global deficit is officially exhausted. Comprehensive modeling from XOM indicates that crude is coiled to violently spike toward $150–$160 per barrel within weeks as inventory levels clear out. Even if the Strait of Hormuz opens tomorrow, the physical supply will remain constrained.
President Donald Trump posted on Truth Social that a deal to end the war with Iran will be signed on Sunday. He added that the Strait of Hormuz will be opened immediately after the signing.
Pakistan said an interim US-Iran deal to reopen the Strait of Hormuz could be finalized within 24 hours, raising expectations that the sides may be nearing a broader agreement after recent skirmishes near the strategic waterway. Bloomberg News State Department Reporter Eric Martin and Jerusalem Reporter Dan Williams joined David Gura and Christina Ruffini on Bloomberg This Weekend to discuss.
The prospects for a peace deal, falling Chinese demand and some workarounds to the Strait of Hormuz closure have helped to stop the crude market from going haywire.
Since the start of the Iran war and Tehran's announcement that the Strait of Hormuz was "closed", the market has grappled to put a figure on lost crude supply and to predict the price of oil.