WTI crude surged past $101 and Brent topped $107 after Iran's Supreme Leader barred uranium transfers abroad, deepening the US-Iran impasse. With the Strait of Hormuz still blockaded and the IEA warning of a summer Supply crisis, oil Market Risk premium shows no sign of easing.

Key Highlights

  • WTI crude surged over 3% to above $101 per barrel; Brent advanced more than 2.5% past $107.
  • Iran's Supreme Leader has barred the transfer of enriched uranium outside the country.
  • The Strait of Hormuz remains under Iranian blockade, threatening global oil supply routes.
  • The US drew nearly 10 million barrels from its Strategic Petroleum Reserve, the largest weekly release on record.
  • The IEA warned oil markets will hit a critical supply threshold if Hormuz stays closed through summer.

Geopolitical Risk Drives the Rebound

Oil markets reversed sharply on Thursday after reports confirmed that Iran's Supreme Leader, Ayatollah Mojtaba Khamenei, has formally directed that the country's enriched uranium stockpiles must not leave Iranian territory. The directive strikes at the core of Washington's demands in ongoing peace negotiations, and markets priced the escalation immediately.

WTI crude futures climbed above $101 per barrel, recovering roughly 3% on the session. Brent, the international benchmark, advanced past $107, clawing back a portion of the nearly 6% combined decline recorded across the two prior sessions. Oil prices remain approximately 50% above pre-war levels, a reflection of sustained supply disruption rather than any temporary panic.

The Uranium Directive and What It Means

Senior Iranian sources indicated that Tehran's establishment views any outbound transfer of enriched uranium as a strategic vulnerability, particularly given repeated US and Israeli threats of renewed military action. Before the war, Iran had signalled conditional willingness to ship out a portion of its 60%-enriched stockpile. That position has since reversed.

Washington has reportedly assured Israel that removing Iran's near-weapons-grade uranium from its territory would form a non-Negotiable component of any peace settlement. Israeli Prime Minister Benjamin Netanyahu has tied his acceptance of any deal to that condition, alongside the dismantling of Iran's proxy network and ballistic missile programme. With Tehran now formally entrenched on the opposite side, the structural distance between the two positions has widened considerably.

Hormuz Remains the Central Supply Variable

The Strait of Hormuz, a critical chokepoint for global seaborne oil trade, remains severely disrupted. Iran has declared a controlled maritime zone through a newly announced authority over the waterway, effectively sustaining the blockade that has compressed supply since hostilities began.

The International Energy Agency issued a direct warning on Thursday: if Hormuz does not reopen before summer, global oil inventories will enter a critical depletion phase. Seasonal Demand from summer travel compounds the problem. Current production levels and existing stockpile buffers are insufficient to absorb both the supply shortfall and the demand increase simultaneously.

Reserve Drawdowns Signal Stress, Not Comfort

The United States withdrew nearly 10 million barrels from its Strategic Petroleum Reserve last week, the largest single-week release on record. The scale of the draw reflects supply stress, not precautionary management. Repeated withdrawals of this size reduce the buffer available for future disruptions and carry a diminishing effect on prices as reserve levels decline.

Diplomatic Signals Remain Ambiguous

President Trump stated this week that he postponed planned airstrikes at the request of Gulf Arab allies, while simultaneously warning Iran that military Options remain active. A fragile ceasefire reached last month has produced little tangible progress. Iranian officials have publicly suggested the pause in hostilities may itself be a tactical manoeuvre rather than a genuine diplomatic opening.

With the uranium question unresolved, Hormuz still partially closed, and both sides signalling strategic distrust, the risk premium embedded in crude prices reflects the structural reality of the conflict rather than short-term speculation.