[MARKET ANALYSIS] Crude wanes off best levels after an APAC rally amid ongoing supply uncertainty as the Iran war enters Day 13

• WTI and Brent futures trade firmer but off best levels after Brent futures briefly rose above USD 100/bbl in APAC hours, with the former currently in a USD 88.61-95.97/bbl range and the latter in a USD 96.69-101.59/bbl parameter. The gains come amid a war that seems to be escalating rather than abating (full Newsquawk Analysis available on the headline feed). 
• The latest attacks on tankers in Iraqi waters heightened concern over Middle East energy infrastructure, and have offset any optimism around the IEA’s coordinated release of crude stockpiles. Analysts at ING said that despite the announcements of reserve releases, there are no signs of de-escalation, with continued disruption to oil flows through the Strait of Hormuz; it noted that the US will begin releasing 172mln bbls from the strategic petroleum reserve next week over about 120 days, equivalent to around 1.4mln BPD, and assuming a similar rate from others, the coordinated release would total about 3.3mln BPD (vs around 20mln BPD that travelled through the Strait before the Iran conflict started).
• Other analysts note that the duration of the conflict and the security of cargoes going through the Strait are the crucial factors for crude prices ahead. WSJ said that the escalating attacks and the US decision not to provide military escorts for oil tankers through the Strait have raised the prospect of a prolonged closure of the waterway. US Energy Secretary Wright said he hopes to see ships through the Strait of Hormuz in a few weeks.
• Elsewhere, the IEA cut 2026 global oil supply growth forecast to 1.1mln BPD (prev. 2.4mln BPD) and total 2026 supply forecast 107.2mln BPD (prev. 108.6mln BPD).
• European natgas prices are firmer but off their best levels after rising almost 8% in sympathy with crude prices. The EU’s Dombrovskis warned that inflation could exceed 3% this year if the Middle East war keeps Brent around USD 100/bbl and gas prices elevated for a prolonged period; under that scenario, 2026 growth would be up to 0.4ppts below the 1.4% pace forecast late last year.
• On the trade front, USTR Greer said the US is initiating a Section 301 investigation into 16 trading partners, including China, the EU, Mexico, Vietnam, India and Japan, and that it could lead to responsive actions including tariffs; he said the US has consulted trading partners, and added that the EU has done nothing of what was agreed in the bilateral trade deal. The prospect of an escalating tariff war could be capping some upside in energy from the demand side of the equation.
• Spot gold is mildly firmer this morning and largely moves in tandem with the USD, which in turn tracks oil prices. Gold retreated overnight following US CPI data, which reduced expectations for any near-term Fed rate cuts, and as the Middle East conflict lifted crude prices. XAU/USD resides in a USD 5,125.64-5,189.86/oz range within Tuesday’s USD 5,117.35-5,238.75/oz.
• 3M LME copper ekes mild gains on either side of USD 13,000/t as the red metal largely tracks the USD and oil for any impact on the growth narrative, with further upside likely capped by the US initiating a Section 301 investigation into 16 trading partners, including China, the EU. 3M LME copper currently resides in a narrow USD 12,920.60-13,055.88/t range at the time of writing.

The escalation of conflict in Iran, now in its 13th day, coupled with recent tanker attacks, is maintaining upward pressure on crude prices despite brief gains being trimmed. This ongoing geopolitical uncertainty is critical, as it affects oil supply dynamics and inflation expectations across global markets, particularly if the Strait of Hormuz sees prolonged disruptions. Additionally, potential retaliatory trade measures by the U.S. could further complicate the energy landscape, affecting demand and prices in the broader commodities space.