CRUDE WRAP: WTI (N6) SETTLES USD 3.10 LOWER AT 88.20/BBL; BRENT (Q6) SETTLES USD 2.80 LOWER AT 91.45/BBL

The crude complex was lower for the duration of the session on Tuesday, but was choppy, and settled off troughs after a Trump threat to Iran. As mentioned, WTI and Brent rebounded off lows, after selling through the duration of the session, after Trump stated the US must respond to the Iranian attack on a US helicopter last night; desks await further clarification or any action on the US President's punchy rhetoric. Note, Axios citing a US investigation, did not know if the Iran downing of a US helicopter was deliberate, but in more recent trade Al Arabiya citing a US official, said it was deliberate. Prior to this, the Middle East developments were more constructive, as a Pakistani source told Al-Hadath that contacts are ongoing with all parties to reach a MoU this week, while Sky News Arabia said the draft agreement has been sent to the US side for review, with confirmation that the draft is preliminarily accepted by the US administration. Further still, Trump remarked that they are negotiating regarding Iran, and victory will happen very soon.

Away from the Middle East, the monthly EIA STEO saw world oil demand at 102.9mln bpd (prev. 104.2mln bpd), and 2027 at 105.3mln bpd (prev. 105.6mln bpd). In commentary, it does not expect Strait of Hormuz traffic to ramp up to pre-Iran war level until early 2027, and assumes oil shipments through Strait of Hormuz resume in Q3 2026. After-hours traders await the weekly private inventory metrics.

WTI traded between USD 85.95-91.55/bbl and Brent USD 89.57-94.42/bbl.