Global balances tightened further as EIA extends maritime blockade timeline and multi-million-barrel deficits compound

Crude futures advanced sharply in Tuesday trading, securing a third consecutive session of gains as algorithmic flows priced in severe institutional baseline revisions and an extended diplomatic stalemate.

The international Brent contract gained $3.56 (3.42%) to settle at $107.77 a barrel, while US WTI crude climbed $4.11 (4.19%) to close at $102.18. The sustained bullish trajectory reflects a paper market actively abandoning near-term normalisation prospects amid hardened negotiation postures between Washington and Tehran.

The physical supply matrix suffered a massive structural downgrade as the US Energy Information Administration (EIA) formally extended its projected Strait of Hormuz closure timeline through late May. This timeline exacerbates an ongoing 10.5 million to 14 million barrel-per-day supply gap, cementing an aggregate one-billion-barrel deficit that Saudi Aramco warns could disrupt global trade patterns until 2027.

This prolonged upstream paralysis is accelerating the depletion of alternative downstream reserves. The EIA drastically revised its global inventory forecast, now projecting a severe 2.6 million bpd structural drawdown for the current year. This macro-level drain mirrors domestic transatlantic balances, with US commercial crude stockpiles projected to contract by an additional 2.1 million barrels this week amid tightening spot market availability across all major import hubs.


Written by: Aiman Haikal