Crude oil fell below $83 per barrel on Thursday, breaking a five-day rally as investors weighed the likelihood of any agreement to reopen the Strait of Hormuz. President Donald Trump asserted that the US had “total control” over the strategic waterway amid escalating tensions between Washington and Tehran, while negotiations remain stalled. The Trump administration is also moving to ratchet up economic pressure on Iran after the US military campaign has so far failed to force the regime to yield. Planned measures include tightening economic sanctions and enforcing a naval blockade aimed at further restricting Iranian oil exports.
At the same time, the IEA’s monthly report signaled that the global oil market is heading for a supply shortfall of 1.8 million barrels per day this quarter as the conflict in the Middle East persists. Separately, EIA data showed that US crude inventories jumped by 17.4 million barrels last week, the largest weekly increase since early 2023.