Crude oil markets experienced a dramatic swing on Thursday after U.S. President Donald Trump first resumed bombing Iran and then abruptly suspended hostilities, announcing that a peace deal signing would be forthcoming. The sharp reversal sent prices tumbling, according to Ship & Bunker.
Sharp Reversal in Crude Prices
West Texas Intermediate dropped 3.2 percent to $87.19 per barrel, while Brent crude fell 3.5 percent to $89.89 per barrel, erasing earlier gains that had been driven by the renewed military action. President Trump stated on his social media network that “discussions and final points have been, in both concept and great detail, approved by all parties involved,” with the time and place of a formal signing to be “announced shortly.”
Also on Thursday, the United Arab Emirates and Iran held direct talks for the first time since the start of the U.S.-Iran conflict, a development described by Ship & Bunker as an effort by Gulf states to end the war through diplomatic channels.
Supply Strain and Demand Shifts
Despite the diplomatic movement, the conflict has already left a significant mark on global energy markets. Bloomberg, as cited by Ship & Bunker, noted that U.S. crude stockpiles have fallen by more than 70 million barrels over the last five weeks — a drawdown rate exceeding 2 million barrels per day, described as the steepest in data going back to the 1980s. Fuel inventories in Singapore have also dropped to their lowest level since 2013, according to the same report.
The prolonged conflict has also accelerated structural demand changes in China. Ship & Bunker reports that gasoline sales at Sinopec fell 8 percent year over year in April, while diesel dropped 6 percent. Goldman Sachs estimated that gasoline and related products consumption in China may have declined by as much as 20 percent overall. Rail travel, subway ridership, and EV charging volumes all rose during the same period, with EV charging hitting a record high in April.
OPEC Revises Demand Outlook
Adding further downward pressure, the Organization of the Petroleum Exporting Countries lowered its forecast for global oil demand growth in 2026 to 970,000 barrels per day, marking its second consecutive downward revision, according to Ship & Bunker. OPEC did raise its outlook for 2027 demand growth.
Does This Matter to You?
The combination of a potential ceasefire, record inventory drawdowns, falling bunker fuel stocks in Singapore, and shifting demand patterns in China represents a rapidly evolving picture for anyone exposed to fuel procurement, supply availability, or freight market risk. Fujairah VLSFO was listed at $1,217.50 per metric ton at the time of reporting, while Singapore VLSFO stood at $748.00 per metric ton, reflecting the geographic disparity in supply stress. Whether a formal peace agreement materialises — and how quickly Hormuz flows could normalise — remain open questions with direct implications for bunkering costs and fuel availability across key corridors.
The direct impact for Gulf Bunkering’s audience will depend heavily on how quickly — and whether — any peace agreement translates into restored supply chains and reduced price volatility.
Gulf Bunkering does not provide operational or security guidance. This article is for informational purposes only. Operators should consult flag state authorities, P&I clubs, and relevant advisories for decisions relating to transit planning.
Sources: Ship & Bunker
