Crude oil prices surged as the U.S. considered restricting Iranian oil exports and financial markets showed an overall rebound. West Texas Intermediate (WTI, Financial) crude rose approximately 2%, settling around $64 per barrel, recovering most of the previous day's losses. The price increase was supported by a conversation between President Trump and Israeli Prime Minister Benjamin Netanyahu, where they reached an agreement on trade and Iran issues. This followed U.S. sanctions on Seyed Asadoollah Emamjomeh, a major player in Iranian liquefied petroleum gas.
Earlier in the month, oil prices had dropped due to concerns that escalating tensions between the U.S. and its major trade partners could harm economic growth and reduce oil consumption, reinforcing expectations of an oversupply. Although prices later retreated from intraday highs after reports of a potential ceasefire agreement between Russia and Ukraine, indicators suggest short-term market strength. The WTI futures' prompt spread reached its widest since February, indicating a tightening supply-demand balance.
Morgan Stanley's global oil strategist, Martijn Rats, noted that the largest sell-off might be over, with seasonal demand potentially providing support, although downward pressure could return later in the year. Meanwhile, U.S. Vice President Vance called for stronger U.S.-India cooperation in energy and defense, as India remains the world's second-largest oil importer.
