DTN Oil Update
WTI Tops $100 as China Refiners Targeted; UAE to Quit OPEC
SECAUCUS, N.J. (DTN) -- Energy markets rallied again Tuesday as continued holdup of tanker traffic on the Strait of Hormuz and a Trump administration crackdown on Chinese refineries buying Iranian oil drove U.S. crude above $100 bbl.
The United Arab Emirates' intent to exit from OPEC next month moderated some of the market's upside on expectations that the cartel's second-largest producer will now focus on aggressively increasing output.
NYMEX WTI crude for June delivery settled up $3.56, or 3.7%, at $ 99.93 bbl after a session high at $101.85.
Elsewhere, by 2:30 p.m. EDT, ICE Brent crude for June was up $3.17, 2.9%, to $111.40 bbl, with an intraday high at $112.70.
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Downstream, NYMEX ULSD futures for May delivery climbed $0.0062 to $3.9809 gallon. Front-month NYMEX RBOB futures rose $0.0813 to $3.5723 gallon.
The U.S. Dollar Index gained 0.137 points to 98.455 against a basket of foreign currencies.
The U.S. Treasury Department directed financial institutions Tuesday to avoid transactions involving China's independent "teapot" refineries. These facilities play a critical role in importing and refining Iranian fuel despite ongoing sanctions. The directive aims to further isolate Iran by tightening the financial net around the primary buyers of its crude exports.
UAE officials said they will exit OPEC and the OPEC+ alliance effective May 1, ending a membership that dated back to 1967. The UAE has grown increasingly reluctant to participate in joint production curtailments that cap the growth potential of its state-run oil firm, ADNOC, which plans to lift oil output above 5 million bpd by the end of next year, prioritizing industry investment over artificial price support.
Analysts said U.S. imports are unlikely to be impacted, as shipments from the UAE averaged just 28,000 bpd last year, or less than 0.5% of total imports. EIA data shows the last significant shipment from the Emirates arrived in November 2025, consisting of approximately 720,000 bbl. The timing of the UAE exit also avoided a broad oil market selloff as its exports remain largely shut-in due to the ongoing Hormuz closure.
On the Iran war front, mediators in Pakistan expect a revised peace proposal from Tehran in the coming days to end the two-month-old war. U.S. President Donald Trump signaled Tuesday he would not accept an earlier version that deferred nuclear negotiations until after a ceasefire was established. Trump also claimed in a social media post Tuesday that Iran is in a "state of collapse" and is seeking to reopen the Strait of Hormuz.
Iran's military rejected Trump's claim, saying it did not consider the war to be over and that any further enemy actions would be met with "new tools, methods, and arenas."
Tehran media also reported that despite a U.S. blockade, satellite monitoring data indicated that 52 vessels, including 31 oil tankers, had crossed into international waters after leaving its ports.
Before the war broke out on Feb. 27, the Hormuz used to serve as many as 140 ships a day carrying a total of about 20 million bpd of petroleum liquids or about a fifth of global supply. Now, Iran allows a handful of international vessels through the strait at any time, while the U.S. tries to block all ships entering or exiting Iranian ports.
The global supply picture aside, market participants will get a perspective on latest U.S. oil inventories when the American Petroleum Institute reports at 4:30 p.m. EDT today crude, gasoline and distillate stockpiles for the week ended April 24. Prior to this, the API reported a 4.47-million bbl drop in commercial crude balances for the week ended April 17.
On the corporate energy front, BP reported a first-quarter underlying replacement cost profit of $3.2 billion, double the previous year's results. The surge was driven by realized Brent prices averaging $81.13 bbl and outsized gains in refining and trading operations.
In economic news, the Conference Board reported that U.S. consumer confidence inched higher to 92.8 in April, citing a resilient labor market that helped offset growing anxiety over soaring gasoline prices and the prolonged conflict in Iran.
The Federal Reserve, meanwhile, kicked off a two-day policy meeting that will culminate in Wednesday's decision on interest rates, that the central bank is expected to leave unchanged at 3.5%-3.75%.