ICE Brent and NYMEX WTI moved higher on Friday morning after three straight sessions of losses, amid reports of renewed clashes between US and Iranian forces. Brent rose nearly 3% to just below USD 103/bbl. The rebound followed US strikes on Iranian military targets after Iran fired on three US Navy destroyers in the Strait of Hormuz. While tensions have escalated, the US has signalled no immediate intent to intensify the conflict and is reportedly still awaiting Iran’s response to a proposal to reopen the trade route.
Looking ahead, oil prices are likely to remain highly headline‑driven, with the recent escalation reinforcing the risk premium. With flows through the Strait of Hormuz unlikely to normalise quickly, markets remain exposed to further upside on any setbacks in diplomatic efforts.
In refined products, Insights Global data shows refined product stocks in the ARA region fell by 108kt week-on-week to 4.5mt in the week ending 7 May. The draw was led by gasoline (‑72kt to 1.1mt) and gasoil (‑34kt to 1.8mt). Gasoil stocks fell for a fifth consecutive week, hitting their lowest level since August 2025, underscoring ongoing supply tightness. Naphtha inventories also declined by 17kt to 374kt, the lowest since March 2025, amid disruption linked to the Strait of Hormuz closure. By contrast, fuel oil and jet fuel stocks rose modestly by 9kt and 6kt to 665kt and 558kt, respectively.
In Singapore, inventories fell by 1.1mbbl to 44.8mbbl, the lowest level since July 2025, as US-Iran tensions curtailed Middle Eastern exports. The decline was driven by middle distillates (‑0.8mbbl) and light distillates (‑0.6mbbl). Residual fuel stocks, however, increased by 387kbbl to 19.9mbbl.
In natural gas, EIA data shows US gas storage rose by 63bcf last week, below market expectations of around 73bcf and the five‑year average build of 77bcf. Total inventories stood at 2.2Tcf as of 1 May, around 6.7% above the five‑year average. The smaller‑than‑expected build supported prices, with front‑month Henry Hub contracts up more than 2% to around USD 2.8/MMBtu.