r/CrudeOil

Most people are treating this like noise. I don’t think it is.

Quick recap for those who missed it: Trump posted on Truth Social Monday calling Iran’s counter-proposals “totally unacceptable” and said the ceasefire is “on life support.” Iran had come back through Pakistani mediators with conditions including partial uranium transfer abroad, war reparations, lifting of the US naval blockade, and recognition of their sovereignty over the Strait of Hormuz. Trump said no to all of it.

Brent jumped 3-4% intraday, touched $104-105/barrel before settling around $103. WTI is knocking on $100 again.

The Hormuz math nobody wants to talk about

The Strait has been largely closed or severely disrupted since late February. Pre-disruption flows were running around 20 mb/d through the strait. Current flows are a fraction of that. That’s not a rounding error, that’s the largest sustained supply disruption in years, and the market keeps getting whipsawed between “ceasefire imminent” headlines and “deal collapsed” reality.

Every false dovish headline = fake selloff = buying opportunity. Every re-escalation = price spikes back. We’ve seen this pattern play out multiple times in the last 6 weeks.

How does Trump’s rejection actually affect the market?

This is the part I keep thinking about.

Trump is running a classic max-pressure playbook. He needs Iran to concede on the nuclear program AND on Hormuz access simultaneously. Iran is “defeated but not done” according to Trump’s own framing, militarily weakened but still capable of proxy disruption and maritime harassment.

The problem is this dynamic is structurally bullish for oil in the short to medium term:

• No deal = Hormuz stays constrained = supply premium stays in the price
• A bad deal (partial concessions) = Hormuz reopens partially = maybe $88-121$ rally
• A real deal (full nuclear + full Hormuz) = sharp reversal, $75-80 possible

Right now the market is pricing somewhere between scenario 1 and 2. If Trump keeps the pressure up without a credible path to resolution, I don’t see what brings oil back down sustainably.

My take:

Case FOR staying above $100:

→ US-Iran ceasefire is still “on life support”

→ Hormuz still blocked = global supply strangled

→ Hot CPI delays Fed rate cuts = stronger dollar = upward pressure on crude

→ No visible de-escalation signal in the short term

Case FOR a reversal:

→ A US-Iran deal could drop Brent 15-20$ in a matter of hours

→ Demand destruction if pump prices keep climbing

→ Potential SPR release from the US administration

In both scenarios, volatility will stay extremely high. There’s definitely an opportunity to gain exposure with some leverage, even up to x500 on Bitget CFDs. Sounds crazy, but it can really help maximize moves if managed properly.

Personally I’ve been adding to my long on oil on dips rather than chasing the spikes. The asymmetry still feels skewed to the upside as long as Hormuz stays closed and there’s no real deal framework on the table.

The counter-argument

Demand destruction is real. Gas prices across the US just hit $4.18/gallon, highest since August 2022. CPI came in at 3.8% this week, highest since May 2023, with energy up 18%. At some point sustained high prices kill their own catalyst.

https://preview.redd.it/18mo1qzqkv0h1.png?width=1195&format=png&auto=webp&s=8aaa37cd8ad2f0a9ddbe2767a30e59f8dbe6786f

Also SPR releases are politically on the table if this drags into summer driving season.

Do you think $100 WTI holds if this ceasefire stays in limbo through June? Or does demand destruction + potential SPR release cap the move from here?

Not financial advice. DYOR.

https://preview.redd.it/ocio1zrvu11h1.png?width=1788&format=png&auto=webp&s=9c91ec355fceb43408571483a59db5003ae4d115

It seems a lot of people (I won't say traders) don't understand what could possibly happen if the US-Iran war ends. Now let me reveal how it could actually affect everyone involved in both positive and negative ways.

But before that, in every war there are always two sides of the story: one taking advantage of the situation and making money from it at the expense of others' health and peace, while the other side is truly concerned about what could happen to the innocent people taking the heat. I think you know the country that chose the first and the country that chose the second.

And if today it ends, the first thing that will happen is excessive supply.

The second thing that will happen is that the excessive supply will reduce demand and make crude oil crash.

The third thing that will happen is that the Strait of Hormuz won't be the center stage of all the unnecessary attention the media is giving it.

And lastly, traders will make money from the crash because oil won't be able to hold. You will just start seeing different short setups on CFDs and brokers.

Now look at the possible reaction and how it could affect crude oil. Do you still want the war to end or not?

With CPI coming in at 3.8% (highest since May 2023), largely driven by energy (+18% YoY), the connection to the US-Iran conflict is becoming obvious. Trump rejected Iran’s conditions, the ceasefire is “on life support,” and the Strait of Hormuz remains blocked. Result: WTI and Brent are holding firmly above $100.

My thoughts:

• Fed: Powell will clearly have to stay hawkish for longer. No rate cuts in June, and maybe not even in September if energy prices keep surging. Sticky inflation is becoming the number one issue again.
• Stocks: Energy stocks (XLE, Exxon, Chevron, etc.) are outperforming and acting as a natural hedge. On the other hand, tech/growth stocks (Nasdaq) are under pressure: high valuations + higher rates for longer = downside pressure. Classic sector rotation in progress.
• Safe havens: Gold ($XAU) and silver are climbing alongside the dollar. Investors are hedging against geopolitical inflation risks.

Personally, I took a long futures position (Bitget CFDs) with some leverage to increase my exposure to oil through $USO as an inflation hedge. With the risk that Hormuz tensions could last for several more weeks, I think oil can stay above $100 and possibly move even higher.

Do you think the Fed will have to delay rate cuts?

What do you guys think?

Why doesn’t the US build a refinery to process our own sweet crude instead of selling,and buying from the Middle East