Brent Nears $110 as Hormuz Shut Amid 2-Month Iran War


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- Global crude benchmark Brent inched towards $110 bbl 
on Monday (4/27) as the Middle East crisis entered its second month, with the 
United States and Iran remaining at odds over a solution that would reopen the 
Strait of Hormuz to a fifth of world petroleum supply.

   President Donald Trump canceled plans over the weekend for U.S. negotiators 
Steve Witkoff and Jared Kushner to meet with their Iranian counterparties in 
Pakistan to try and find an end to the war after an indefinite ceasefire he 
announced last week.

   On Sunday (4/26) Iran offered to reopen the Strait of Hormuz, provided the 
U.S. lifts its blockade on Iranian ports and delay nuclear negotiations.

   U.S. Secretary of State Marco Rubio on Monday dismissed the Iranian offer, 
which he presumed would be conditional upon Tehran's vetting of which ships got 
to go on the strait, and at what price -- given the Iranians' well-reported 
plans to impose a toll on traffic through the Hormuz.

   "They cannot normalize -- nor can we tolerate them trying to normalize -- a 
system in which the Iranians decide who gets to use an international waterway 
and how much you have to pay them to use it," Rubio said.

   Prior to the outbreak of the Iran war on February 27, the Strait of Hormuz 
used to be a transit point for as many as 140 ships a day, carrying about 20 
million bpd of petroleum liquids. Now, Iran lets a handful of ships go through 
the strait at any time, squeezing energy global supplies. Compounding matters 
is the U.S. block of any ship entering or exiting Iranian ports.

   It remains unclear if President Trump will entertain the Iranian offer, as 
he previously vowed not to lift the blockade until a deal is "100% complete." 
White House Press Secretary Karoline Leavitt said Trump discussed the Iranian 
proposal with his team on Monday, and that the public would hear from the 
president soon.

   The International Maritime Organization (IMO) warned that disruptions on the 
Strait of Hormuz would likely persist long after the conflict ends. The IMO 
expects vessels to remain stationary in Middle East waters until there is 
tangible de-escalation, noting that 20,000 seafarers and 2,000 ships were 
currently stranded due to the closure.

   The NYMEX WTI crude futures contract for June delivery settled up $1.97, or 
2.1%, at $96.37 bbl after a session at $ 97.67 bbl.

   ICE Brent crude for June rose by $2.90, or 2.8%, to  $108.23 bbl, with an 
intraday high of $109.79.  

   Among refined products, NYMEX ULSD futures for May delivery ended the day up 
$0.0873 at $ 3.9747 gallon. Front-month NYMEX RBOB futures climbed by $0.3964 
to $ 3.4910 gallon.

   The US dollar index retreated by 0.044 points to 98.32 against a basket of 
foreign currencies by 3:00 p.m. ET.




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