DTN Oil Update
WTI at $107 Amid US Standdown on Iran, NATO Hormuz Plan
SECAUCUS, N.J. (DTN) -- Crude futures settled little changed Tuesday amid reports of a NATO deployment planned for the Strait of Hormuz and U.S. President Donald Trump's remarks that he will prioritize diplomacy for now over resuming attacks on Iran.
NYMEX WTI crude for June settled down $0.89 at $107.77 bbl, after a session low at $106.76.
ICE Brent for July closed down $0.80 at $111.28 bbl, after an intraday bottom at $109.01.
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Downstream, NYMEX June RBOB finished down $0.0645 at $3.6962 gallon. But NYMEX ULSD futures for June delivery closed up $0.048 at $4.1625 gallon.
The U.S. Dollar Index rose 0.085 points to 99.19 against a basket of foreign currencies.
Crude futures came off the day's lows as NATO was reported to be debating plans to protect international vessels on the Hormuz by July if the vital energy chokepoint remains blocked into the summer.
The waterway, which used to be a transit point for up to 140 ships a day transporting some 20 million bpd of petroleum liquids, is currently blockaded by both Iran and the United States. Tehran has not allowed most international vessels on the chokepoint since U.S.-Israel strikes began against Iran at end-February.
The U.S., on its part, is preventing any vessel attempting to access Iranian ports via the Hormuz, and even from outside the strait. On Tuesday, U.S. forces were reported to have seized an Iran-linked tanker in the Indian Ocean while it was traveling west of Malaysia on the Malacca Strait with over a million bbl of crude loaded at Iran's Kharg Island in February.
NATO's potential mission on the Hormuz marks a shift from the alliance's previous stance, which limited involvement to post-conflict stabilization versus U.S. President Trump's demand for more international commitment to normalize shipping on the Hormuz.
A France-U.K.-led initiative of over 40 nations is independently planning a defensive naval mission to secure merchant traffic once a sustainable ceasefire is achieved. President Trump has maintained a temporary ceasefire on Iran since April, although he has regularly threatened to resume attacks.
The president said Tuesday he would withhold attacks against Iran for a few more days, following requests for patience from regional allies. While stating that a few Middle East countries and Israel were engaged in diplomatic efforts, the president expressed skepticism about a potential deal, saying he has heard such optimism before.
Iran's Deputy Foreign Minister Kazem Gharibabadi, in response, reiterated Tehran's stance that any renewed military aggression would be met with full force by a nation prepared for both triumph and martyrdom.