Brent Swings $25 in a Week as US Strikes and Ceasefire Whipsaw Oil

Brent Swings $25 in a Week as US Strikes and Ceasefire Whipsaw Oil The largest single-day crude decline since 2020 followed within days of prices touching $119, as the market lurches between war escalation and peace signals. ICE Brent crude front-month recovered to $105.83 on Thursday, gaining 0.77%, after two consecutive sessions of decline. NYMEX WTI crude front-month advanced 0.99% to $99.23. The bounce came on persistent supply concerns and a drawdown in US crude inventories, with EIA data showing the United States drew nearly 10 million barrels from its strategic petroleum reserve last week, the largest weekly SPR withdrawal ever recorded.¹ The withdrawal underscores how aggressively Washington is depleting reserves to manage the crisis. Iran has announced measures to strengthen its control over the Strait of Hormuz, a chokepoint that previously handled a significant share of global oil and LNG exports. The strait has been effectively inaccessible for more than eight weeks.^1,7 The price action over the past week has been extraordinary. ICE Brent crude briefly touched $119 on Thursday before reversing lower after Israel said it was helping reopen Hormuz, ending the session at $108.65. NYMEX WTI front-month slipped to $96.14 after trading higher in the day. The intraday range alone exceeded $20.⁴ Days earlier, ICE Brent crude dropped about 14% after Trump said Washington was holding talks linked to the conflict and had decided to pause planned strikes on Iranian energy infrastructure, Bloomberg reported. The announcement eased fears of immediate escalation, sending crude sharply lower.⁶ Then came the ceasefire. Trump announced a two-week pause, and NYMEX WTI crude front-month crashed 16.4% to $94.41 in its largest single-day decline since 2020. ICE Brent crude tumbled 13.3% to $94.75. The S&P 500 surged 2.5%. JPMorgan's trading desk told clients the market was likely to treat the ceasefire as a de facto end of the conflict, assuming it is not a feint from any of the parties.² But that assumption is fragile. Official statements from Washington and Tehran did not offer a clear picture of what follows the two-week pause. The Economist reported that energy analysts modelling a war involving Iran have long feared two specific developments: the Islamic Republic lashing out at its oil-rich neighbours and a blockade of Hormuz. Both have now occurred. Traders expected disruptions to last days, not weeks. Eight weeks later, the strait is still closed.^8,2 The US entry into the war added a new dimension. Experts warned of triple-digit prices after US strikes on Iranian nuclear facilities. Iran's foreign minister issued a warning in response. Oil markets entered a new phase of uncertainty, CNBC reported.⁵ Geopolitical tensions have continued to reignite between episodes of diplomatic optimism. An attack on a nuclear facility in the UAE and drone strikes across the region pushed crude oil above $111 even as peace talks were supposedly underway.³ ICE Brent crude topped $111 in Asian trade as Hormuz remained inaccessible and US-Iran talks were nowhere near resumption, OilPrice.com reported. ICE Brent crude front-month rose 2.61% to above $111 in the early European session. Analysts raised their forecasts on the Hormuz stalemate.⁷ The gas market moved in sympathy. ICE Endex TTF front-month traded up over 11% at around EUR 61 per megawatt-hour. NYMEX Henry Hub front-month was 1.7% higher at $3.116 per million BTU. The war premium is not confined to crude.⁴ What to watch is whether the two-week ceasefire converts into a durable agreement or expires without extension. If it holds, the $94 floor tested during the ceasefire crash becomes the new range bottom. If it fails, the $119 intraday high from last Thursday becomes the reference point, and the record SPR drawdown pace suggests Washington is running out of buffer.^2,1