Crude Steady as Iran Risks Persist

Oil swung between gains and losses as traders parsed a barrage of data from leading energy forecasters amid little sign of a breakthrough between Iran and the US over the Strait of Hormuz.

West Texas Intermediate settled little changed near $83 a barrel, after jumping 10% over the previous four sessions. Futures have been sensitive to headlines on efforts tied to reopening the crucial waterway, repeatedly fluctuating between optimism that a deal is near and indications that progress has stalled.

US President Donald Trump claimed the US had "total control over the Hormuz Strait," as Washington and Tehran toughened their stances. Meanwhile, Pakistan said the deadline for a memorandum of understanding between the two nations could be extended.

The commodity briefly touched intraday lows after the Energy Information Administration reported that US crude inventories expanded by 17.4 million barrels last week, nearly double the increase estimated by a widely followed industry group. That was the biggest build in more than three years and coincided with imports rising to the highest level since November 2024.

Diesel exports, meanwhile, hit an all-time high of nearly 2 million barrels a day, sending futures for the fuel higher. Tightness in the refined products market has pushed gas and diesel prices to a record seasonal high, according to data from the American Automobile Association.

"Ongoing weakness in crude exports has combined with a massive jump in imports to drive on the second largest crude inventory build in history, with the vast majority of the build happening on the Gulf Coast," said Matt Smith, Americas lead oil analyst at market intelligence firm Kpler.

The whopping inventory add didn't fully assuage concerns that American barrels will be able to offset deep supply losses spurred by the Iran war. Data released Wednesday by the International Energy Agency showed that as the energy shock continues, global oil inventories will fall this quarter at more than twice the rate previously estimated. Markets are estimated to face a shortfall of 1.8 million barrels a day.

Brent has surged almost 50% this year, and some fuel prices have rallied even harder, with diesel also pushed higher by the impact of the Russia-Ukraine war. The US expects oil disruptions stemming from the Iran conflict to reach about 600,000 barrels a day through the end of 2027, according to the Short-Term Energy Outlook from the Energy Information Administration.

Tensions around Hormuz remain elevated, with a US Navy helicopter this week firing two Hellfire missiles at a Panama-flagged cargo vessel that was attempting to breach a blockade of Iranian ports. Hostilities have also spread to the Red Sea, where Iran-backed Houthis have targeted ships and energy infrastructure.

Visible traffic through Hormuz is down to a trickle, but some oil is exiting the Persian Gulf, often on tankers with their transponders switched off. US Energy Secretary Chris Wright said in a social media post that almost 9 million barrels a day is crossing the strait with US military assistance.

Oil Prices

• WTI for September delivery rose 7 cents to settle at $83.27 a barrel in New York.
• Brent for October settlement edged up 7 cents to settle at $88.98 a barrel.