Brent Hits 2026 High as U.S. Weighs New Iran Attacks


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- Oil prices jumped 8% Wednesday (4/29), driving Brent 
crude to a 2026 high of nearly $120 bbl, as the United States reportedly mulled 
resuming attacks against Iran after a month of diplomatic efforts that failed 
to end the conflict and reopen the Strait of Hormuz to petroleum cargoes.

   Sharp weekly declines in U.S. stockpiles of crude, gasoline and distillates 
reported by the U.S. Energy Information Administration (EIA) added to the 
bullish tone.

   NYMEX WTI crude for June delivery settled up $6.95, or 7%, at $106.88 bbl 
after an intraday high at $107.68.

   By 2:30 p.m. ET, ICE Brent crude for June delivery rose by $7.26, or 6.5%, 
to $118.52 bbl. The session high was $119.76, the highest level recorded since 
June 2022 when it was at  $121.74.     

   Downstream, NYMEX ULSD futures for May delivery climbed $0.2286 to $4.1998 
gallon. Front-month NYMEX RBOB futures rose $0.1750 to $3.7354 gallon.

   The U.S. Dollar Index climbed 0.294 points to 98.77 against a basket of 
foreign currencies.

   The oil rally attained new vigor on reports that U.S. President Donald Trump 
was considering authorizing fresh strikes on Iran if it refuses to make 
concessions to end the conflict. The U.S. military command in the Middle East, 
known as CENTCOM, has prepared a contingency plan for a short wave of intense 
strikes on Iran infrastructure, reports said.

   Trump, in an interview with Israeli media Wednesday, rejected Iran's 
proposal to lift a naval blockade around its ports enforced by Washington be 
lifted first, for peace talks to resume between the two sides.

   Tehran had also wanted discussions on its nuclear enrichment program, the 
main catalyst for the U.S.-Israeli attacks on Iran that began on February 27, 
to be deferred -- another condition Trump has refused.

   Notwithstanding new military action, Trump has said the naval blockade is 
more effective than any assault on Iran, given the embargo applied on the oil 
exports that form the lifeblood of Tehran's economy.

   The U.S. blockade on Iranian ports and Tehran's obstruction of the Hormuz, 
combined, have brought the Middle East oil trade to a virtual standstill, 
freezing some 20 million bpd of petroleum liquids or a fifth of world supply.

   The U.S. has become one of the main beneficiaries of the conflict, turning 
into a net crude exporter for the first time last week as international demand 
for its oil soared amid the two-month long supply disruption, weekly data from 
the Energy Information Administration (EIA) showed Wednesday.

   U.S. crude exports hit a record 6.44 million bpd for the week ended April 
24, surging 14% above the previous peak in February 2023, the EIA data showed. 
Total petroleum exports erased previous records to reach 14.18 million bpd as 
U.S. barrels became the global swing supply during the unprecedented energy 
crisis. Net imports dropped to a historic trough of 708,000 bpd on a four-week 
rolling average.

   In domestic inventories, U.S. crude stocks fell by 6.2 million bbl last week 
-- the largest weekly decrease in two months -- to 459.5 million bbl during the 
week ended April 24.  Gasoline inventories fell by 6.1 million bbl lto 222.3 
million bbl and distillate fuel balances dropped by 4.5 million bbl to 103.6 
million bbl. Only jet fuel stocks were higher, rising 500,000 bbl to 44.2 
million bbl.

   On the inflation front, the Federal Reserve said Wednesday it had left U.S. 
interest rates unchanged at 3.5-3.75% after two days of discussions on the 
economy convinced the central bank that risks of inflation -- particularly from 
high oil prices sustained by the Iran war -- were greater than any benefit 
gained from rate reductions.

    




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