Oil prices are ripping higher this morning (rebounding aggressively of overnight lows) after US and Israel attacked upstream Iranian energy assets for the first time since the war (While the US struck oil export hub Kharg Island late last week, it limited that attack to military targets began).
Iran’s IRGC responded by publishing a list of Gulf energy sites in Saudi Arabia, the United Arab Emirates and Qatar that “have become direct and legitimate targets” following the attack on South Pars, the semi-official Tasnim news agency reported.
“New attacks bring the attention back to the physical supply reality of the war - curtailments in energy tighten every day,” said Rabobank’s energy strategist Florence Schmit.
Trump has waived The Jones Act in the hopes of easing domestic prices.
Of course, geopolitical chaos is driving the price of oil more than domestic supply and demand. Nevertheless, overnight saw API report crude stocks rising while refined product inventories declined.
API
Crude +6.56mm
Cushing
Gasoline -4.56mm
Distillates -1.39mm
DOE
The official data confirmed API's reporting overnight with a big crude build and big refined product draws.
Source: Bloomberg
This is the 4th weekly build in US crude, pushing the total stockpile had surged to its highest since June 2024 headed into the war.
Source: Bloomberg
There was no draw or addition to the SPR last week, according to the official data (the fourth week of no change).
Exports for oil and fuels remain the key factors to watch to see if the US is backstopping global markets that have seen millions of barrels of supply curtailed by the conflict in Iran. On the fuels side, distillates and jet fuel will be the most important ones to keep an eye on given how prices for those two products have rocketed.
US crude production remains just off record highs.
WTI was trading just above $98 ahead of the official data (up dramatically from the $91 handle at the lows overnight) and held those gains after...
Finally, what really matters to the average American is the price of gas , which is rising at a record pace and looks set to keep rising...
...and even if we see some 'end' to all this Mideast chaos soon, the ramifications are set in motion and Memorial Day is not that far off