investors assess U.S.-Iran tensions, lingering supply fears
An aerial view of Marathon Petroleum Corp’s Los Angeles Refinery is seen on April 2, 2026 in Carson, California.
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After closing sharply higher on Monday, oil prices fell as traders continued to assess the risk of sudden disruptions in supply due to renewed tensions between the United States and Iran.
Futures for international comparison Brent Crude oil for July delivery fell by 0.60% to $113.77 per barrel on Tuesday, while the US West Texas Intermediate Futures lost 1.35% to $105.06 per barrel. Brent and WTI rose 6% and 4% respectively on Monday.
The fragile ceasefire between the United States and Iran appeared close to unraveling on Monday after the United Arab Emirates was hit by Iranian drones and missiles, while Washington said it had sunk Iranian ships in the Strait of Hormuz.
Speaking to Fox News, US President Donald Trump warned that Iran would “fly off the ground” if it targeted US ships protecting commercial traffic in the strait.
In a separate post on Truth Social, Trump noted that a South Korean cargo ship had come under fire in the waterway, adding: “Maybe it’s time for South Korea to come join the mission!”
Brent crude oil
Global oil stocks are not yet at critically low levels, Goldman Sachs wrote in a note on Monday, but the pace of reductions and the uneven distribution across regions are raising concerns about local shortages.
Easily accessible buffers of refined products are rapidly depleting, especially petrochemical feedstocks such as naphtha and LPG, as well as jet fuel, the bank said.
Chevron CEO Mike Wirth warned Monday that fuel shortages are a growing concern in some parts of the world as the strait remains closed.
“As people look at the fact that supply is very tight, I think it’s not just a price issue,” Wirth told CNBC’s David Faber at the Milken Institute Global Conference. “Can we actually get the fuel? I think in the next few weeks we’ll see these effects start to move through the system.”
Goldman said total global oil inventories, including crude and refined products held both onshore and offshore, are currently forecast at around 101 days of demand and could fall to 98 days by the end of May. While this remains above emergency thresholds, the aggregate figures mask sharper shortages in certain regions and products, particularly where export restrictions limit supply flows.
“Our estimates of refined product supply and countries’ own crude stocks point to higher risks of product shortages in South Africa, India, Thailand and Taiwan,” bank analysts said.
— CNBC’s Spencer Kimball contributed to this report.
