Key Highlights
- Brent and WTI futures gained approximately 3% Thursday following Wednesday’s 13%+ decline
- Wednesday’s plunge followed Trump’s announcement of a temporary U.S.-Iran truce
- Lebanese strikes by Israel cast uncertainty over ceasefire parameters
- Oil tanker passage through the Strait of Hormuz remains suspended by Iran
- Goldman Sachs projects Brent averaging above $100/barrel if strait closure extends another month
Crude markets staged a comeback Thursday after experiencing their sharpest single-session decline since April 2020. Brent crude advanced 2.8% to reach $97.68 per barrel, while West Texas Intermediate gained 3.3% to settle at $97.50 per barrel.
Wednesday’s dramatic selloff occurred when U.S. President Donald Trump revealed a two-week truce agreement with Iran. Market participants initially interpreted this development as indicating supply constraints would diminish.
The optimism proved short-lived. Israeli military operations in Lebanon proceeded even following the ceasefire declaration, generating uncertainty regarding the truce’s actual parameters.
Israel stated its Hezbollah-related operations fall outside the agreement’s scope. Iran responded by characterizing peace negotiations with the U.S. as “unreasonable” given present circumstances and claiming Israel violated the arrangement.
Iran continues blocking oil tanker movement through the Strait of Hormuz. This critical waterway facilitates roughly one-quarter of global seaborne petroleum commerce and has remained predominantly closed following the February U.S.-Israeli strike on Iran.
Goldman Sachs Outlines Market Projections
Goldman Sachs strategists cautioned that extended closure of the strait for an additional month could push Brent to average above $100 per barrel during the latter half of 2026.
Their primary forecast anticipates transit resumption this weekend with Persian Gulf shipments returning to pre-conflict volumes within four weeks. This scenario places Brent at an $82 average during the third quarter and $80 during the fourth quarter.
An adverse scenario involving prolonged closure combined with regional production losses would drive Brent to $120 in the third quarter and $115 in the fourth quarter.
Goldman strategists noted their price projections face “upside risks.” Vice President JD Vance has similarly characterized the ceasefire as precarious.
Trump communicated via social media that reopening the Strait of Hormuz for safe passage had been agreed upon “a long time ago.” He indicated military operations against Iran could restart should terms go unmet.
U.S. Crude Inventories Reach Three-Year Peak
The U.S. Energy Information Administration disclosed that crude reserves increased by 3.1 million barrels to 464.7 million barrels during the week concluded April 3. This figure represents the highest stockpile level in nearly three years and significantly exceeded forecasts calling for a 1 million barrel gain.
Refined product inventories presented contrasting trends. Distillate reserves, encompassing diesel and heating oil, decreased by 3.1 million barrels amid robust export activity. Gasoline stocks declined by 1.6 million barrels.
Iran’s Ports and Maritime Organization designated two authorized safe passage corridors for ships traversing the strait, concentrated around Larak Island adjacent to Bandar Abbas.
ING strategists indicated complete strait reopening appears improbable in the immediate future and anticipate prices will maintain support as supply disruptions require extended periods to resolve.
Brent futures had reached a crisis peak of $119.50 before plummeting sharply Wednesday on ceasefire announcements.
