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Crude futures rallied in Thursday trading, approaching the $100 threshold as speculative optimism surrounding US-Iran peace negotiations rapidly deteriorated. The paper market repriced higher on reports that negotiators have scaled back expectations to a temporary memorandum, severely diminishing the probability of a comprehensive resolution to the ongoing Strait of Hormuz blockade.

The international Brent contract climbed $4.46 (4.7%) to settle at $99.39 a barrel. Concurrently, US WTI crude gained $3.40 (3.7%) to close at $94.69.

The bullish price action explicitly ignored contradictory political rhetoric regarding an imminent deal, focusing instead on the compounding physical reality of the prolonged supply disruption.

Global physical availability continues to deteriorate at a historic pace. Structural market models estimate that approximately 13 million barrels per day of oil flow remains disrupted by the maritime closure. This acute physical deficit is now heavily drawing down global inventories, as international consumers aggressively procure alternative supplies to replace stranded Middle Eastern volumes.

The resultant structural strain is increasingly evident in US inventory metrics. Domestic commercial crude stockpiles posted an unexpected 913,000-barrel draw, accompanied by corresponding declines in gasoline and distillate fuels driven by surging export demand. The fundamental outlook remains tightly constrained, further cemented by the US Treasury confirming it will not renew sanctions waivers for specific Iranian and Russian crude allocations.

Written by: Aiman Haikal