(May 6): Oil held a decline as the US said offensive operations against Iran are over as it shifts to protecting shipping in the Strait of Hormuz, which remains largely closed.
West Texas Intermediate rose towards US$103 a barrel, after sliding 3.9% on Tuesday, while Brent closed near US$110. “Operation Epic Fury is concluded,” US Secretary of State Marco Rubio told reporters at the White House, 66 days after the US and Israel began bombing Iran. “We achieved the objectives of that operation.”
Brent crude has climbed by more than 50% since the conflict started at the end of February, cutting off hundreds of millions of barrels of Persian Gulf oil from global markets. Flows through the key maritime chokepoint are now constrained by a double blockade, with Tehran obstructing shipping while the US is stopping vessels from accessing Iranian ports.
On Tuesday, Washington played down the prospect of a return to active war with Defense Secretary Pete Hegseth confirming the truce that began just under a month ago is still in place. Meanwhile, General Dan Caine, the chairman of the Joint Chiefs of Staff, said attacks by Tehran on vessels in the Persian Gulf and the UAE didn’t constitute a breach of a ceasefire.
The shutdown around Hormuz has left more than 1,550 commercial vessels, carrying some 22,000 sailors, trapped in the Persian Gulf, Caine said.
In the US, industry data showed crude inventories fell 8.1 million barrels last week, which would be the biggest draw since mid-February if confirmed by official data due later on Wednesday.
See also: Oil holds gain as Iran, US exchange fire in Middle East flare-up
“We are holding the pattern from rally to profit-taking each day,” said Carl Larry, an oil and gas analyst at Enverus. “Markets may take it in stride but irrational exuberance usually gets the best of the market. Draws bring all the bulls to the yard.”
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