Recap: The crude market continued to surge on Tuesday after prices soared over 6.2% on Monday, as the U.S.-Israeli conflict with Iran widens, with Israel attacking Lebanon and Iran responding with strikes against energy infrastructure in Gulf countries and tankers in the Strait of Hormuz. Tankers and container ships are avoiding the waterway after insurers cancelled coverage for vessels and global oil and gas shipping rates soared. Concerns increased after a senior Iranian Revolutionary Guards official said the Strait of Hormuz is closed and warned that Iran will fire on any ship trying to pass the waterway. Meanwhile, United Arab Emirates authorities said they were dealing with a serious fire at Fujairah port and Iraq’s Kirkuk crude oil loadings at Turkey’s Ceyhan port were halted on Tuesday. Iraqi oil officials said Iraq may be forced to cut its oil output by more than 3 million bpd in a few days amid the closure of the Strait of Hormuz. Iraq has as of Tuesday decreased production from the Rumaila oil field by 700,000 bpd and cut 460,000 bpd from the West Qurna 2 field. The oil market posted a low of $70.41 on the opening and continued on its upward trend throughout the overnight session. It posted a high of $77.98 by mid-morning before it gave up some of its sharp gains amid news that Saudi Arabia was attempted to reroute some of its crude exports to the Red Sea to bypass the Strait of Hormuz and U.S. President Donald Trump announced that the U.S. would provide insurance to all maritime trade in the Gulf region. The April WTI contract settled up $3.33 at $74.56 and the May Brent contract settled up $3.66 at $81.40. The product markets ended sharply higher once again, with the heating oil market settling up 28.65 cents at $3.1869 and the RB market settling up 8.68 cents at $2.4574.
Technical Analysis: The oil market will likely retrace some of its sharp gains seen over the last couple of days following the Trump administration’s decision to provide insurance and guarantees to maritime trade in the Gulf. However, any retracement will be limited amid the concerns over further disruptions to Middle East oil and gas supplies. While Saudi Arabia may be seeking to reroute its oil exports to the Red Sea, the tanker rates on that route also doubled and some tanker fixtures are reportedly failing already as shippers avoid the Middle East altogether amid the widening conflict. The crude market is seen finding resistance at $77.98, $78.40, $78.47, $79.44, $80.59 and $80.77. Support is seen at $72.96, $71.41, $70.41, $69.87, its gap from $69.20 to $67.83, $64.85 and $63.60.
Fundamental News: Oman’s Foreign Minister, Badr Albusaidi, reaffirmed his country’s call for an immediate ceasefire in the conflict between Iran and the U.S. and Israel and a return to responsible regional diplomacy. The Gulf country had been mediating talks between Iran and the United States before the Israeli and U.S. airstrikes began on Saturday.
Bloomberg News reported that the International Energy Agency is ready to aid in stabilization of the global oil market affected by the war in Iran, noting that member countries hold more than a billion barrels in emergency stockpiles.
Bloomberg reported that diesel’s premium to crude oil increased to its highest level since the summer of 2023, as the conflict in the Middle East threatens global supplies. Benchmark diesel futures in Europe cost over $40/barrel more than crude earlier on Tuesday, the widest that premium or crack spread has been in 2 ½ years. The fuel’s premium to oil also increased in the U.S. and Asia. Janiv Shah, a vice president for commodity markets at Rystad Energy, said diesel deliveries to Europe from refineries in Asia that were taking crude from the Persian Gulf “are now severely at risk”. He added that “Persian Gulf volume flows to Europe are also risked.”
Standard Chartered sees asymmetric upside risk to its forecasts if the Middle East conflict escalates further and impairs production from Iran or other regional producers. The bank raised its first-quarter 2026 Brent forecast to $74/barrel from $62/barrel, its second-quarter forecast to $67/barrel from $63/barrel, and its 2026 average forecast to $70/barrel from $63.50/barrel.
Early Market Call – as of 8:55 AM EDT
WTI – Apr $73.94, down 86 cents
RBOB – Apr $2.4680, up 1.09 cents HO – Apr $3.1656, down 2.59 cents
