Oil Slides as U.S. Confirms Iran Ceasefire Still Holds
CNBC reported Tuesday that oil prices retreated sharply after U.S. officials confirmed the Iran ceasefire remains intact. Markets had been rattled a day earlier when Tehran launched drones and missiles at the United Arab Emirates.
Prices Give Back Sharp Monday Gains
International benchmark Brent crude closed down roughly 4% at $109.87 per barrel Tuesday. U.S. West Texas Intermediate settled just above $102, shedding nearly the same margin. Both contracts had surged more than 4% on Monday as the ceasefire appeared on the verge of collapse.
Defense Secretary Pete Hegseth told reporters the ceasefire was “not over.” He added that any escalation decision ultimately rests with President Trump, but stressed that conditions currently do not warrant resumed combat.
Joint Chiefs Chairman Gen. Dan Caine reinforced that assessment. He said Iranian attacks this week fell “below the threshold of restarting major combat operations at this point.”
Hormuz Operation Aims to Restore Commercial Flow
The Pentagon launched a maritime operation Monday to reopen the Strait of Hormuz to commercial vessels. Hegseth said two U.S. commercial ships, escorted by Navy destroyers, transited the waterway successfully.
Danish shipping giant Maersk confirmed one of its U.S.-flagged vessels made the passage under military protection. Hegseth suggested Iran was embarrassed by the development, having previously claimed control of the strait.
President Trump warned Monday via Fox News that Iran would face overwhelming force if it targeted ships operating under U.S. military escort. Iranian Foreign Minister Abbas Araghchi responded on social media, arguing that no military solution exists for what he framed as a political crisis.
Fuel Supply Warnings Mount Despite Ceasefire Calm
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The ceasefire language calmed markets, but supply anxiety has not fully dissipated. Goldman Sachs warned in a Monday note that global oil inventories, while not yet at crisis levels, are depleting faster than headline figures suggest. Refined products including jet fuel, naphtha, and LPG face the sharpest regional shortfalls.
Total global oil stocks are estimated at roughly 101 days of demand and could slip to 98 days by month-end, according to Goldman. That remains above emergency thresholds, but masks localized shortages.
Chevron CEO Mike Wirth told CNBC the concern is no longer purely about pricing. “Can we get the fuel?” he asked at the Milken Institute Global Conference, warning that supply effects will ripple through the system over coming weeks.
Iraq, an OPEC member, is reportedly offering its term buyers steep discounts on crude loaded this month. The catch, per Bloomberg, is that tankers must be willing to transit the Strait of Hormuz to collect the barrels.
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