Crude oil prices hit highest level since Iran war on expectations of prolonged blockade of Strait of Hormuz

The lack of progress in negotiations between the US and Iran continues to push crude oil prices higher, so we expect another increase in vegetable oil prices next week.

June Brent crude futures have risen by 12% since the beginning of the week to $118/barrel (+15.7% per week), the highest level since 2022 (the beginning of the war in Ukraine), amid the breakdown of talks between the US and Iran and Trump’s statement that the US will organize a long-term naval blockade of Iran until it agrees to their conditions.

A closed-door meeting at the White House discussed plans for short and effective strikes on Iranian infrastructure to increase pressure on the Ayatollah’s regime and the IRGC.

June WTI crude futures rose 13.6% to $107/barrel (+15% for the week), just short of reaching the 2022 high.

US crude oil prices were supported by the weekly EIA report, which showed crude oil inventories fell by 6.23 million barrels, 0.19 million barrels more than expected, although as of April 24, inventories were 1.2% above the 5-year seasonal average. Gasoline inventories fell by 6.075 million barrels, 2.785 million barrels more than expected (2.4% below the 5-year seasonal average), and distillate inventories fell by 4.49 million barrels to a 9.5-month low, 2.15 million barrels more than expected (10.3% below the seasonal average).

Despite the blockade of the Strait of Hormuz by the US Navy and the IRGC, according to the maritime intelligence *Windward* and *Lloyd’s List Intelligence*, vessel traffic through the strait has picked up in the past few days. Thus, on April 29, 13 vessels passed through the strait, of which 9 exited, including 2 tankers under the Panamanian flag and several dry cargo ships, and on April 28 – 13 vessels, of which 10 vessels exited the strait, although two days before that, traffic was paralyzed.

The US command reports that 42 Iranian vessels were not released from the strait, and according to analysts’ estimates, this amounts to 60-65 million barrels of oil, which continues to worsen the economic situation for the Iranian regime.

Crude oil stocks on tankers that have been idle for at least seven days rose 25% last week to a three-month high of 153.11 million barrels, according to Vortexa, even though tankers typically hold half that amount. This means that an unblocking of the strait would quickly saturate the market.

This morning at the opening of Asian markets, Brent crude oil prices rose to $125/barrel (the highest level since the start of the war against Iran and since 2011) in anticipation of the IRGC’s promised strikes on neighboring Persian Gulf countries.

Tags: prices