Oil Pulls Back After Monday’s Surge as U.S.-Iran Strait Standoff Rattles Markets

CNBC reported Tuesday that oil prices moved lower in Asian trading hours, giving back a portion of Monday’s steep gains as traders weighed the genuine risk of sustained supply disruption through the Strait of Hormuz.

Brent crude for July delivery fell around 0.60% to approximately $113.77 a barrel. U.S. West Texas Intermediate dropped a sharper 1.35% to near $105.06 a barrel. Both benchmarks had closed Monday with gains of 4% to 6%.

Ceasefire on the Brink

The pullback followed an extremely volatile session driven by rapidly escalating U.S.-Iran hostilities. Iranian drones and missiles struck the United Arab Emirates on Monday. Washington responded by saying it had sunk Iranian naval vessels operating near the waterway.

President Donald Trump issued stark public warnings, telling Fox News that Iran would face total destruction if its forces targeted American ships guarding commercial passage through the strait. In a separate Truth Social post, Trump noted that a South Korean cargo vessel had come under fire and suggested Seoul consider joining the U.S.-led maritime mission.

Background: Why the Strait Matters So Much

The Strait of Hormuz is the world’s single most critical oil chokepoint. Roughly one-fifth of global petroleum supply transits the narrow passage daily. Any sustained closure or interference sends immediate shockwaves through energy futures markets worldwide.

A fragile ceasefire between Washington and Tehran had appeared to be holding until this week’s flare-up. The latest exchange of fire has now left its status deeply uncertain.

Goldman Warns on Inventory Buffers

Goldman Sachs, in a research note published Monday, cautioned that global oil inventories are not critically depleted yet but are drawing down at a concerning pace. The bank estimated total above-ground stocks at roughly 101 days of demand coverage, with that figure potentially dropping to 98 days by end of May.

More worrying, analysts flagged that aggregate numbers mask acute localized shortages. Refined product buffers, including jet fuel, naphtha, and LPG, are being drained fastest. Goldman specifically named South Africa, India, Thailand, and Taiwan as markets facing elevated scarcity risk.

Executives Sound the Alarm

Chevron CEO Mike Wirth amplified those concerns at the Milken Institute Global Conference on Monday. Speaking to CNBC’s David Faber, Wirth said the question in some parts of the world has shifted beyond price entirely. Availability of fuel is now the pressing issue. He warned that those effects would ripple through supply chains over the coming weeks.

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