Crude Oil Targets 20 Percent Monthly Gain Despite Middle East Supply Easing
Crude benchmarks are on track for a near 20 percent monthly increase, though recent signs of resumed tanker traffic and impending US strategic reserve limits present a complex outlook for energy markets.
Crude oil benchmarks are on course to record a monthly gain of nearly 20 percent, despite a slight pullback in recent trading sessions. As of the latest data, Brent crude stood at $87.67 per barrel and West Texas Intermediate at $82.07, both down 1 percent from Thursday.
The recent dip follows reports of increased tanker movement through the Strait of Hormuz, even as hostilities between the United States and Iran persist. While current traffic remains a fraction of the volume seen before the US and Israel struck Iran on February 28, futures prices react sharply to any marginal improvement in supply flow.
Again Capital partner John Kilduff noted that traders anticipate a wave of available supply once regional conflicts stabilize. “There is this sense that there is a lot of supply waiting to hit the market once all of this is resolved, and that is a weight against any kind of dramatic price rise,” Kilduff said.
ING commodity strategists pointed to the challenges of monitoring current export volumes amid disabled tracking systems. “Though still in single digits, there are also reports that the shuttling of oil across the strait has resumed. This will not be detected by tracking data, given that transponders will be turned off,” the strategists wrote. US Energy Secretary Chris Wright also noted that some 13 million barrels daily were leaving the Persian Gulf.
Reserve Limits and Regional Security
Conversely, a tightening of official United States supplies looms on the horizon. The Department of Energy has signaled that releases from the Strategic Petroleum Reserve must soon cease as domestic stockpiles run low.
These government draws have been instrumental in capping price volatility and maintaining market stability over recent months. Energy analysts anticipate that the inevitable cessation of these releases will remove a key bearish pressure, potentially driving crude prices higher in the coming quarters.
Meanwhile, geopolitical efforts to secure alternative maritime routes are advancing rapidly. Saudi Arabia is actively forming a defense-strengthening coalition focused on protecting the Bab el-Mandeb Strait and the Gulf of Aden.
Riyadh reports that 14 nations have officially backed this security initiative. The supporting countries include Turkey, Pakistan, Egypt, Sudan, and Djibouti, signaling a coordinated multilateral push to stabilize critical global shipping corridors.
