Crude oil prices have declined amid ongoing uncertainty regarding oil flows through the Strait of Hormuz and tight US fuel inventories, according to MUFG's Derek Halpenny [1]. President Trump stated that the Strait of Hormuz has been cleared of mines, though skepticism remains about the accuracy of this claim [1]. US Energy Secretary Chris Wright reported that the US army facilitated the shipment of over 15 million barrels through Hormuz in a single day last week, with a 7-day average exceeding 8 million barrels per day. However, tracking data suggests a lower figure of 2 to 6 million barrels per day, indicating a possible exaggeration, though untracked ships without transponders could account for the discrepancy. The true number is likely between these estimates, which would still be significant [1].
Oil prices have shown a tendency to respond more to positive news, falling in response, rather than rising on negative developments. For example, a New York Times article indicating the US was considering returning diplomats to the Middle East—implying Washington does not expect a return to full-scale conflict—contributed to lower oil prices. However, some of this decline was partially reversed following subsequent developments [1].
Additionally, the Iran-Oman charging Strait of Hormuz deal was interpreted as a sign of defiance by Iran, potentially prompting a US response. Meanwhile, US energy inventory data revealed very large drawdowns in distillates and gasoline, with the EIA reporting that distillate inventories are now at their lowest level on record for this time of year [1].
These factors—uncertainty over Hormuz traffic, shifting diplomatic signals, and record-low US fuel inventories—are keeping energy markets highly sensitive to changes in supply expectations [1].
CONCLUSION
Oil prices are being shaped by conflicting reports on Hormuz shipping volumes and record-low US fuel inventories. Market sentiment remains cautious, with prices reacting sharply to both geopolitical developments and inventory data.