Oil prices rose about 5% on Tuesday after U.S. President Donald Trump said he did not want to extend the soon-to-expire ceasefire in the Iran war and that the U.S. military was “anxious to leave” if negotiations were unsuccessful.
Brent crude futures rose $4.30, or 4.5%, to $99.78 a barrel at 1:13 p.m. EDT (1713 GMT), while U.S. West Texas Intermediate CLc1 crude rose $4.75, or 5.3%, to $94.36.
Pakistan said there was still no confirmation that Iran would participate in last-minute peace talks with the United States, after American forces boarded a huge Iranian oil tanker at sea with just a day to go before the ceasefire.
Shipping traffic through the Strait of Hormuz, which normally handles about 20% of global oil and liquefied natural gas (LNG) supplies, remained broadly halted Tuesday, with only three ships passing through the waterway in the past 24 hours, according to shipping data.
The European Union will provide advice to airlines on how to manage issues such as airport slots, passenger rights and public service obligations in the event of a jet fuel shortage due to the war in Iran, the bloc’s transport chief said.
German Economy Minister Katherina Reiche said jet fuel supplies are not at risk as refineries adapt to growing demand, but added that the government was monitoring the situation.
Russian supplies
Ukrainian President Volodymyr Zelenskiy, however, said the Druzhba pipeline, which carries Russian oil to Europe, was ready to resume operations, signaling that Ukraine now expects a 90 billion euro aid package to be released. But three industry sources said Russia was preparing to suspend oil exports from Kazakhstan to Germany via the Druzhba pipeline from May 1.
Elsewhere in Russia, Ukrainian drones struck an oil pumping and shipping facility in Russia’s Samara region overnight.
In Germany, Europe’s largest economy, investor sentiment fell to its lowest level in more than three years in April, as businesses began to feel the economic consequences of the Iran war well beyond rising prices, economic research institute ZEW said.
U.S. retail sales rose more than expected in March as the war in Iran pushed up gasoline prices and led to a record rise in revenue at gas stations, while tax refunds supported spending elsewhere.
Federal Reserve chief nominee Kevin Warsh has called for “regime change” at the U.S. central bank, including a new approach to controlling inflation and a communications overhaul that could discourage colleagues from saying too much about the direction of monetary policy.
Trump told CNBC he would be disappointed if Warsh didn’t cut interest rates immediately after taking office after being approved by the Senate.
Analysts worry that involving more politics in interest rate decisions will reduce the Fed’s ability to control inflation. Trump wants the Fed to cut rates, which would lower consumer costs and could boost economic growth and demand for oil.
US oil stocks
These crude price increases came as the market awaited guidance from weekly storage reports from the American Petroleum Institute (API) trade group later Tuesday and from the U.S. Energy Information Administration (EIA) on Wednesday.
Analysts forecast that energy companies removed 1.8 million barrels of crude from storage in the week ended April 17.
If accurate, this would be the first time energy companies have withdrawn crude from storage for two consecutive weeks since February, compared to an increase of 0.2 million barrels during the same week last year and a decline of 3.7 million barrels over the past five years (2021-2025).
