Global crude oil benchmarks began retreating on Tuesday (May 5) as the Pentagon moved to ease market jitters after confirming that the truce between Washington and Tehran remains intact despite the heaviest military clashes since the cease-fire took effect in early April.
International benchmark Brent crude futures were down more than 2 per cent at US$111.45 a barrel by Tuesday morning in New York, while US West Texas Intermediate (WTI) futures were down more than 3 per cent at US$102.65.
The market turmoil stemmed from the start of a US military operation aimed at reopening the Strait of Hormuz to commercial shipping. The vital waterway, which handles a fifth of the world’s oil and natural gas, has been largely disrupted, stranding about 1,550 ships.
Defense Secretary Pete Hegseth described the naval escorts as separate from the broader war and said the current hostilities were not a violation of the April 8 ceasefire.
However, those clashes proved fatal on Monday (May 4). After the US escorted two domestic-flagged commercial vessels, including the Maersk-operated Alliance Fairfax, through the strait, Washington informed Destroyed seven small Iranian military boats.
In contrast, Tehran said the US strike hit a passenger boat in the gulf, killing five civilians.
concurrent, iran launched Drone and missile attacks on the UAE have injured three people in the Fujairah petroleum industry zone, while a South Korean ship was also hit. reportedly killed Near the strait.
The Pentagon is insisting that its naval escorts will move forward. However, President Donald Trump adopted a more aggressive tone, alert It said on Monday that Iran would be “blasted off the face of the earth” if it targeted US ships.
Addressing the domestic economic results on Tuesday, Trump framed inflation pressures as a necessary geopolitical cost. “It’s a very small price to pay for actually getting rid of nuclear weapons from mentally challenged people,” he told reporters.
Meanwhile, Tehran rejected the US statement and said its own blockade remained in effect. Iranian Foreign Minister Abbas Araghchi said the recent clashes “make clear that there is no military solution to the political crisis.”
Pointing to diplomatic backchannels, Araghchi said: “As talks move forward with the compassionate effort of Pakistan, the US should be wary of being dragged back into the quagmire by well-wishers. The UAE should do the same.”
Beyond geopolitical instability, energy officials warn that physical supply chains are breaking down. OPEC producer Iraq signals market crisis Heavy discounts are reportedly being offered on crude oil This month to get buyers ready to move out of the way.
Goldman Sachs (NYSE:GS) Estimate Total global oil stocks currently cover 101 days of demand, but warned that easily accessible buffers of refined products such as naphtha, LPG and jet fuel are being rapidly depleted.
Don’t forget to follow us @INN_Resource For real-time updates!
Securities Disclosure: I, Gian Liguid, do not have any direct investment interest in any of the companies mentioned in this article.
