WTI at $112 as U.S. Keep its Tuesday Deadline on Iran


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- Oil futures rose on Monday (4/6), recovering from 
early declines, after the U.S. reiterated its warning that Iran's power plants 
and bridges will be destroyed by Tuesday (4/7) if it did not reopen the Strait 
of Hormuz it has blockaded.

   U.S. President Donald Trump said the Tuesday 8:00 p.m. ET deadline he had 
given to Iran to "will not be moved again." The ultimatum, originally issued 
March 21, had been postponed twice previously.  

   "I've given them chances, and they haven't taken them. Iran won't have 
bridges and power plants if there is no deal," Trump said. "We have a plan 
where every bridge in Iran will be decimated by 12 o'clock tomorrow night. 
Every power plant in Iran will be out of business, burning, exploding and never 
to be used again, by 12 o'clock. And it will happen over a period of four 
hours."

   U.S. Defense Secretary Pete Hegseth, appearing at a news conference with the 
president, said Monday will mark be the largest volume of strikes on Iran since 
the February start of the U.S.-Israeli military campaign. "Tomorrow's strikes 
on Iran will be more than today," Hegseth added.

   The NYMEX WTI crude futures contract for May delivery settled Monday's trade 
at $112.41 bbl, up $0.87, or 0.8%, as the second week of April began. It rose 
11% in the first week.

   ICE Brent futures contract for June closed at $109.77 bbl, higher by $0.74, 
or 0.7%. 

   The spread between the two benchmarks was about $7 in WTI's favor, after 
shifting to that structure last week for the first time since 2022.

   Among refined products, RBOB futures for May delivery finished at $ 3.3082 
gallon (3.2880), up $0.0202 on the day. Front-month ULSD futures ended at $ 
4.3284 gallon (4.3611), easing $0.0327.

   The US dollar index softened by 0.060 points to 99.795 against a basket of 
foreign currencies.

   Energy prices slid earlier on Monday on the potential chance of a truce 
after Pakistani mediators, who had been in touch with U.S. and Iranian 
officials, said there could be a ceasefire. With that, the Hormuz, the waterway 
for 20 million bpd of global petroleum cargoes, could also reopen, allowing 
broader peace talks, the mediators said.

   Tehran is using military strikes and opaque vetting to control the strait, 
which connects Middle East oil exporters with the Persian Gulf and global 
waterways.  Two Qatar-owned LNG tankers were among those that transited the 
Hormuz on Monday, reports said. Prior to that, Japanese and Iraqi vessels, 
along with tankers from countries deemed "friendly" to Iran, including China, 
Russia and India, were allowed to pass.

   Iran and Oman, which border the Hormuz along with the UAE, were reportedly 
finalizing on Sunday (4/5) a formal protocol for transit on the strait, viewed 
by analysts as a precursor to the first-ever toll collection on vessels in the 
region.

    Trump, when asked about the toll collection plan on Monday, said the U.S. 
should have the prerogative for doing so.

    




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