Crude is giving back part of the war premium Friday because traders are willing to price a possible path out of the Iran conflict. The physical market is not trading normal conditions. Tanker traffic through Hormuz remains far below pre-war levels. Diesel is still above $6.50 per gallon in the United States and at record premiums in Europe. The market is taking premium out of crude on a report about talks while the product and freight markets continue to price a disrupted system.
Oil News: Crude Sells Diplomacy as Diesel and Freight Keep Supply Risk Alive
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Key Points:
- Crude sold Iran talks, but conditional terms, military escorts and Houthi attacks show Hormuz is not back to normal trade.
- A possible U.S. diesel export restriction would trap barrels at home while Europe keeps paying record premiums for distillate.
- WTI’s $12 discount to Brent has not lifted exports as freight costs make U.S. crude too expensive to move to Asia.