Summary
- Trump tells aides he is willing to end Iran war without reopening Hormuz, report says
- Kuwait says oil tanker was hit in Iranian attack at Dubai port
- Brent heads for record monthly gain, WTI for most since 2020
(Reuters) – Brent oil futures headed for their largest monthly gain in volatile trading on Tuesday, as investors weighed the likelihood of U.S. President Donald Trump ending the Iran war against supply shocks from a prolonged closure of the Strait of Hormuz.
Brent crude futures for May , which expire on Tuesday, were up $2.22, or 1.97%, at $115 per barrel at 0959 GMT. The more active June contract , was trading 64 cents, or 0.6%, higher at $108.03 per barrel at the same time.
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U.S. West Texas Intermediate futures for May were up $1.35, or 1.31%, at $104.23 at 0959 GMT.
Front-month Brent futures were set for an all-time record monthly gain of 59% according to LSEG data that stretches back to June 1988. WTI was up 56%, the biggest jump since May 2020.
VOLATILE TRADE AS FRONT-MONTH EXPIRES
Tuesday’s session was volatile, with front-month Brent futures swinging in a range of up 2.5% to down 1.3% from Monday’s close.
Trump told aides he is willing to end the military campaign against Iran even if the Strait of Hormuz remains largely closed, leaving its reopening for a later date, The Wall Street Journal reported on Monday, citing administration officials.
The U.S. president had warned that the U.S. would “obliterate” Iran’s energy plants and oil wells unless Tehran reopened the waterway.
“While diplomatic signals remain mixed, the ground reality suggests that uncertainty will persist,” said Sugandha Sachdeva, founder of SS WealthStreet, a New Delhi-based research firm.
“Even in the event of de-escalation, restoring damaged infrastructure will take time, keeping supply tight.”
Highlighting the threat to seaborne energy supplies, Kuwait Petroleum Corp on Tuesday said its fully loaded crude oil tanker Al Salmi, capable of carrying up to 2 million barrels, was struck by an alleged Iranian attack at a Dubai port. Officials also warned of the risk of oil spills in the area.
Yemen’s Iran-aligned Houthi forces targeted Israel with missiles on Saturday, raising concerns about possible disruption in the Bab el-Mandeb Strait, the chokepoint linking the Red Sea and Gulf of Aden for ships moving between Asia and Europe via the Suez Canal.
Saudi Arabia has rerouted its Gulf crude exports through this passage, with some 4.658 million barrels per day sent to the Red Sea port of Yanbu, Kpler data showed, compared with an average of 770,000 bpd in January and February.
“With the oil market’s remaining buffers gradually being consumed, the market’s vulnerability to a prolonged closure of (Hormuz) means that we are moving closer to physical oil shortages across a wider geographic scope, and the upward momentum for oil prices is likely to strengthen further,” said Lin Ye, a vice president for commodities markets and oil at Rystad Energy.
Reporting by Robert Harvey in London, Mohi Narayan in New Delhi and Anmol Choubey in Bengaluru; Editing by Thomas Derpinghaus, Kirsten Donovan and Barbara Lewis
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