Crude settled flat as massive 496-million-barrel supply deficit counters diplomatic optimism

Crude futures settled largely unchanged in Wednesday trading, caught in a structural holding pattern as speculative optimism surrounding a potential US-Iran diplomatic resolution was offset by the severe physical reality of compounding supply losses.

The international Brent contract edged up 14 cents (0.1%) to settle at $94.93 a barrel, while US WTI crude rose one cent to close at $91.29. The muted paper action masks a deeply constrained physical sector that continues to absorb historic geopolitical shocks.

Forty-five days into the Strait of Hormuz closure, maritime transit remains severely restricted to a fraction of its normal 130-vessel daily volume. The fundamental deficit continues to compound rapidly, with data indicating cumulative Middle Eastern crude and condensate supply losses have now reached 496 million barrels.

This structural shortage is poised to tighten further on the regulatory and logistical fronts. The US Treasury confirmed it will not renew sanctions waivers for Iranian and Russian oil purchases, while the active US naval blockade has effectively halted all Iranian maritime trade, extinguishing near-term prospects for supply relief.

Providing localized prompt-market support for the US benchmark, the Energy Information Administration reported an unexpected 0.9 million-barrel draw in domestic commercial crude stockpiles. The draw countered consensus forecasts for a build, highlighting persistent underlying tightness despite the broader macroeconomic uncertainty.

Written by: Aiman Haikal