US Strikes Near Bandar Abbas Send Brent 3.7 Percent Higher; WTI Falls to $93.86 as Iran Talks Split Markets

American forces struck two Iranian missile sites and a mine-laying vessel near Bandar Abbas on Tuesday, sending ICE Brent crude 3.7 percent higher to $99.72 per barrel. West Texas Intermediate moved in the opposite direction, falling 2.8 percent to $93.86 per barrel as diplomatic headlines weighed on the US benchmark. The session opened a $5.86-per-barrel Brent premium over WTI, reversing the WTI premium that had prevailed during the initial weeks of the Hormuz closure.

What Drove Each Benchmark

Brent tracks seaborne Middle East supply directly, making it more sensitive to Hormuz shipping disruptions. WTI prices domestic US production and reacts sharply to forward-looking diplomatic signals. US CENTCOM described the operation as self-defense strikes targeting IRGC missile launch sites and two vessels laying naval mines in the Strait of Hormuz. The Islamic Revolutionary Guard Corps claimed to have downed a US stealth drone and vowed retaliation for what it called a ceasefire violation. WTI fell because traders priced in risk that the strikes would complicate the peace talks that had driven the benchmark down 6 percent on May 19.

The $5.86 Spread in Context

Oil Authority calculated the WTI-Brent differential reversal. In April, as the Hormuz closure first took hold, WTI briefly traded at a premium of roughly $4 per barrel above Brent, because US crude could still reach Asian buyers while Gulf supply was shut off. Tuesday's $5.86 Brent premium represents a swing of nearly $10 per barrel in the differential over seven weeks. That shift quantifies how quickly Middle East shipping risk redistributes between the two benchmarks as the conflict oscillates between escalation and negotiation.

The WCS-WTI differential ran at $17 per barrel in April according to Alberta Energy Regulator data, implying a Western Canadian Select price near $76.86 on Tuesday's WTI settlement. Oil sands operators running current-quarter hedge books at higher WTI assumptions will feel that gap in Q2 results. Suncor's and Cenovus's record Q1 results both assumed commodity conditions closer to the $96 levels that prevailed before this week's session.

Iran Ceasefire Negotiations in Qatar

Iranian Foreign Affairs spokesman Esmaeil Baghaei led a delegation to Qatar on Monday to finalize a ceasefire agreement, according to diplomatic sources cited by Nikkei. A Pakistan-mediated ceasefire has held since April 8. President Trump stated Tuesday that talks were proceeding nicely but warned of no deal at all if negotiations collapsed. Nikkei reported that Iran could agree to clear mines from the Strait within 30 days of a formal agreement, allowing commercial shipping to resume.

That 30-day mine-clearing window matters for price forecasts. The EIA's May 2026 Short-Term Energy Outlook projected Brent at roughly $106 per barrel for May and June 2026, with the baseline assumption that Hormuz remains effectively closed until late May and shipping begins to pick up in June. Tuesday's strikes complicate that reopening timeline. The EIA projects Brent will fall to $89 per barrel in Q4 2026 and $79 per barrel in 2027 as Middle East supply recovers.

SPR Draw and Global Inventory Revision

The US Strategic Petroleum Reserve stood at 374.18 million barrels last week, reflecting a drawdown of 41.26 million barrels over 11 weeks as the administration sought to limit domestic price spikes from the Hormuz closure. EIA's May STEO revised global inventory expectations sharply: inventories are now projected to fall 2.6 million barrels per day in 2026, against a 0.3 million barrels per day drawdown projected in the April outlook. That revision reflects 10.5 million barrels per day of Middle East production shut in during April alone, across Iraq, Saudi Arabia, Kuwait, the UAE, Qatar, and Bahrain.

When WTI first fell to $90 per barrel on May 19, as our May 19 coverage documented, the optimism rested on an assumption that the ceasefire framework would hold and Hormuz would reopen quickly. Tuesday's strikes showed that framework remains fragile. Brent and WTI will continue to price different risk exposures from the same conflict until either a durable reopening materializes or escalation redraws the terms of engagement.