Rich Asplund

Wed, Jun 18, 2025, 8:52 AM3 min read

July WTI crude oil (CLN25) today is down -1.06 (-1.42%), and July RBOB gasoline (RBN25) is down -0.0054 (-0.24%).

Crude oil prices today gave up an early advance and turned lower on signs that the conflict between Israel and Iran could de-escalate after President Trump said Iran reached out about the possibility of negotiations.  Crude prices today initially moved higher after Iran's Supreme Leader Ayatollah Ali Khamenei said his country won't surrender to Israel after President Trump had demanded Iran's "unconditional surrender."  Crude prices are falling today despite a weaker dollar and a bullish weekly EIA report.

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Crude prices moved higher initially today following an overnight meeting between President Trump and his national security team, which bolstered speculation the US is close to joining Israel's attacks on Iran after President Trump called for Iran's "unconditional surrender."

So far, Iran has not impeded ship movement through the vital Strait of Hormuz, which handles about 20% of the world's daily crude shipments/  However, navigational signals from over 900 vessels moving through the strait have been disrupted due to "extreme jamming" of signals from the Iranian port of Bandar Abbas, which has caused a collision of two tankers Tuesday near the Strait of Hormuz.

Oil prices continue to be undercut by tariff concerns after President Trump said last Wednesday that he intends to send letters to dozens of US trading partners within one to two weeks, setting unilateral tariffs ahead of the July 9 deadline that came with his 90-day pause.

A decline in crude oil held worldwide on tankers is bullish for oil prices.  Vortexa reported Monday that crude oil stored on tankers that have been stationary for at least seven days fell by -7.2% w/w to 73.97 million bbl in the week ended June 13.

Concern about a global oil glut is negative for crude prices.  On May 31, OPEC+ agreed to a 411,000 bpd crude production hike for July after raising output by the same amount for June.  Saudi Arabia has signaled that additional similar-sized increases in crude output could follow, which is viewed as a strategy to reduce oil prices and punish overproducing OPEC+ members, such as Kazakhstan and Iraq.  OPEC+ is boosting output to reverse the 2-year-long production cut, gradually restoring a total of 2.2 million bpd of production.  OPEC+ had previously planned to restore production between January and late 2025, but now that production cut won't be fully restored until September 2026.  OPEC May crude production rose +200,000 bpd to 27.54 million bpd.