CRUDE WRAP: WTI (U6) SETTLES USD 4.57 LOWER AT USD 75.77/BBL; BRENT (V6) SETTLES USD 4.41 LOWER AT USD 79.36/BBL
Crude prices were hit following multiple updates pointing towards progress surrounding the reopening of the Strait of Hormuz: 1) Qatari official says language had been drafted for a possible US-Iran deal, 2) Oman and Iran are reportedly expected to make an announcement regarding the Strait of Hormuz soon; 3) Iran weighs allowing Europe to clear mines in the Strait of Hormuz. Altogether, the updates saw crude reverse initial gains, with each new development sparking further pressure on prices, despite overnight reports that a US base in Kuwait was struck. Reporting shows that the Iran-Oman plan would give Iran full control over inbound shipping, whilst Oman would clear departures after notifying Iran; however, the US would likely reject the proposal given the deal opposes free navigation. WTI and Brent traded between USD 75.16-82.33/bbl and USD 78.70-86.33/bbl, respectively.
Separately:
- Ukraine struck a major Russian oil refinery 800km from the border, attacking the Syzran oil refinery (170k BPD); a major fire broke out on the premises, RBC Ukraine reported
- Goldman Sachs expects Brent crude to trade within a USD 80–90/bbl range until a new US-Iran agreement is confirmed or attacks escalate significantly
Crude has a well-worn playbook for perceived Hormuz de-escalation: the risk premium built into the front of the curve unwinds quickly on headlines of diplomatic progress, even when the underlying supply has not changed, because the market is pricing the probability of disruption rather than disruption itself. The sequence here follows that pattern, gains reversing with each successive headline rather than on any single confirmation. The key distinction is between a deal the US would accept and one it would not: the reported Iran-Oman arrangement conditioning transit on Iranian control of inbound shipping runs against the freedom-of-navigation position Washington has historically treated as non-negotiable, which limits how much premium can come out on this headline alone. Against that, continued strikes on Russian refining capacity act in the opposite direction, tightening product balances independently of the Gulf story, and the two risks have on past occasions traded as near offsets in the flat price while showing up more clearly in spreads and product cracks. Sell-side ranges framed around a confirmed agreement or significant escalation effectively mark the two tails; the tells from here are whether any announcement materialises from the Oman-Iran channel, the US response to it, and mine-clearance logistics, since clearance timelines have historically determined how fast premium actually leaves rather than the headline itself.