Oil Steadies as Trump Extends Energy-Attack Pause

Summary

• Oil prices are steadying as President Trump extends the deadline for striking Iran's energy infrastructure, reducing immediate escalation risks.
• The extended deadline allows more time for U.S.-Iran talks, with Iran proposing control over the Strait of Hormuz in counterproposals.
• The Strait of Hormuz remains critically blocked, with most crude oil and refined products stuck, though some Iranian-linked vessels pass through for a fee.
• Alternative pipelines via Saudi Arabia's Red Sea coast to Fujairah are insufficient to replace normal strait volumes.
• The blockage heavily impacts refined product exports, including jet fuel and diesel, which Gulf countries have invested billions to expand.
• Diesel shortages raise costs for industry, while jet fuel scarcity drives up airline prices.
• A Macquarie analyst warns prolonged blockage could push oil prices to $200 per barrel, indicating significant upside risk.
• Longer duration increases the risk of permanent facility damage, making restoration harder and sustaining price pressures.
• The situation remains fluid, with jawboning and market talk influencing prices during the extended period.