Overview
- This weekend the United States and Iran agreed to halt strikes and enter negotiations, a move that sent U.S. crude down about 8% and Brent lower by roughly 4%.
- Fighting and attacks continue to threaten key chokepoints with Houthi strikes in the Red Sea and Ukrainian strikes on Black Sea terminals forcing tanker reroutes and export suspensions.
- Refined fuels are especially tight because product stocks started lower than crude and refinery damage plus Russian diesel limits have pushed crack spreads and jet fuel costs to record levels.
- Governments and industry have used tools such as strategic stock releases, a temporary Jones Act waiver, tanker rerouting and refiners running near capacity to ease constraints but commercial buffers remain thin.
- The IEA notes over 1 billion barrels of government emergency stocks exist but warns against complacency and markets should watch whether negotiations hold or renewed attacks re-ignite sharp price spikes and higher transport costs that would hit airlines and consumers.