Following a sharp increase on Monday, oil prices declined on Tuesday as traders continued to assess the risk of impending supply disruptions amid renewed tensions between the United States and Iran. Futures for international benchmark Brent crude for July delivery slid by 0.60 percent to USD 113.77 per barrel, while U.S. West Texas Intermediate futures fell by 1.35 percent to USD 105.06 per barrel. These declines followed Monday’s session, during which Brent and WTI settled 6 percent and 4 percent higher, respectively.
A fragile ceasefire between the United States and Iran appeared close to falling apart on Monday after the United Arab Emirates was targeted by Iranian drones and missiles, while Washington reported that it had sunk Iranian vessels in the Strait of Hormuz. In an interview, U.S. President Donald Trump warned that Iran would be “blown off the face of the earth” if it attacked U.S. ships safeguarding commercial traffic through the strait. In a separate post, Trump stated that a South Korean cargo vessel had come under fire in the waterway, adding, “Perhaps it’s time for South Korea to come and join the mission.”
According to a note from Goldman Sachs on Monday, global oil inventories have not yet reached critically low levels; however, the pace of drawdowns and uneven distribution across regions are raising concerns about localized shortages. The bank noted that easily accessible buffers of refined products are being depleted rapidly, particularly in petrochemical feedstocks such as naphtha and liquefied petroleum gas, as well as jet fuel. Chevron CEO Mike Wirth warned on Monday that fuel shortages were a growing concern in some regions of the world as the strait remains closed.
“I think as people look at the realities of very tight supplies, it’s not just a question of oil price. It’s actually—can we get the fuel? I think over the course of the next several weeks, we’ll see those effects begin to move throughout the system.” CEO Mike Wirth added
Global Oil Stocks Inventory
Goldman Sachs estimated that total global oil stocks, including crude and refined products held both on land and at sea, currently represent approximately 101 days of demand, a figure that could fall to 98 days by the end of May. While this remains above emergency thresholds, the aggregate data mask sharper shortages in specific regions and products, particularly where export restrictions limit supply flows. The bank’s analysts further pointed out that their estimates of refined product supplies and countries’ own crude stocks indicate higher risks of product scarcity in South Africa, India, Thailand, and Taiwan.
