U.S. Oil Prices Swing Amid Middle East Tension and Inventory Shifts

Market Recap

Oil prices retreated on Tuesday after a brief surge that pushed WTI futures below $111 a barrel. The pullback follows a volatile week in which Brent and WTI briefly breached $117 as President Trump’s 8 p.m. deadline to reopen the Strait of Hormuz loomed. U.S. crude inventories rose by 3.7 million barrels in the week to April 3, adding further pressure on prices.

Diplomatic Factors

Traders weighed the possibility of a diplomatic breakthrough in Tehran. The deadline, set to force Iran to reopen the strategic waterway, sparked a short‑lived rally, but the absence of a concrete agreement sent markets back to a cautious stance.

Domestic Impacts

Higher global oil prices have already lifted U.S. gasoline to an average of $4.14 per gallon, with diesel near its 2022 peak. While the rally offered a brief boost to energy stocks, the underlying supply crunch and geopolitical risk keep volatility high.