Oil prices fell over 7% as geopolitical tensions eased briefly, though supply disruptions in Russia and the Red Sea persist.
Brent crude briefly dipped below $90 per barrel as the US and Iran paused retaliatory strikes, easing immediate geopolitical risks. The retreat marked a more than 7% drop at one stage, driven by market relief after 13 days of escalating tensions.
Despite the de-escalation, supply constraints remain, including halted oil loadings at Russia’s Sheskharis terminal (650k barrels per day) and the CPC terminal (1.7m barrels per day). Vessel flows through the Strait of Hormuz have yet to recover, keeping risks elevated.
Speculative net longs in oil and ICE gasoil increased, primarily due to short covering and tightness in middle distillates. Analysts warn that clarity on the permanence of the pause is needed for a sustained price recovery.