DTN Oil Update
Oil Dips as Trump Calls for International Patrol of Hormuz
SECAUCUS, N.J. (DTN) -- Crude futures dipped Monday as traders awaited the international community's response to U.S. President Donald Trump's call for a joint patrol of the Strait of Hormuz to protect tankers using the waterway to get Middle Eastern oil out to the world.
Separately, Trump's threats to attack oil facilities on Iran's Kharg Island offset some of the market inertia caused by the standoff over the Hormuz, which Iranian forces have made impassable to vessels shipping 20% of the world's petroleum cargoes. Kharg Island functions as the backbone of Iran's crude export system, handling approximately 90% of the nation's volume.
P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]
The high-level stakes for oil since the start of U.S.-Israeli strikes on Iran on Feb. 27 have led to a 40% appreciation in energy prices. Occasionally, markets have dipped on signs that Tehran -- which has blockaded the Hormuz and struck at neighbors who were U.S. allies -- might be adequately subdued to end the war.
By 8:50 a.m. EDT on Monday, crude prices were down as much as 4%. NYMEX WTI crude futures for April delivery fell by $3.80 to $94.91 bbl. ICE Brent crude for May delivery slid by $1.29 to $101.85 bbl.
NYMEX RBOB futures for April eased by $0.0258 to $3.0156 gallon. ULSD for April retreated by $0.0475 to $3.9672 gallon.
The U.S. Dollar Index was little changed against a basket of currencies at 100.30.
Uncertainty over the outcome of the more than two-week long war has grown amid comments by U.S. Energy Secretary Chris Wright who said on Sunday, March 15, that the conflict could stretch over "the next few weeks". President Trump, on the hand, insists on a quick end despite initially giving a 4-5 week timeline for the joint U.S.-Israeli campaign.
Iran, meanwhile, has struck a defiant chord, with new Supreme Leader Mojtaba Khamenei saying last week that Tehran will continue using the energy markets as leverage in its fightback.
To ease the market situation, Trump is weighing a suspension of the U.S. Jones Act for shipping to ease vessel shortages caused by the Hormuz blockade. U.S. Treasury Secretary Bessent also announced a 30-day sanctions waiver last week to unlock Russian oil that is currently on water.
The Trump administration and other governments are, meanwhile, trying to get more oil onto the market, most substantially by releasing more than 500 million bbl altogether from strategic reserves.