Oil Prices Steady as Inventory Surge Balances Iran Sanctions

Highlights:

• WTI crude held above US$68 at the time of writing, despite a 7.1 million-barrel surge in U.S. stockpiles — the largest since January.
• U.S. sanctions targeted 22 foreign entities linked to Iranian oil sales, but analysts say market impact may be limited without a clear supply cut.
• Red Sea attacks by Houthi rebels failed to raise a risk premium in oil prices as most vessels are already avoiding the route.

US Crude Stockpiles See Largest Jump Since January

Oil prices remained largely unchanged as markets digested contrasting signals: a major increase in U.S. crude inventories and renewed efforts by the U.S. government to clamp down on Iranian oil exports.

At the time of writing, West Texas Intermediate (WTI) crude was trading just above US$68 per barrel, marking its third consecutive day of modest gains, despite intraday volatility. The U.S. Energy Information Administration (EIA) reported a surge of 7.1 million barrels in domestic crude stockpiles last week, the largest weekly gain since January. The build was attributed to reduced refining activity, weaker exports, and lower weekly imports.

U.S. Tightens Grip on Iranian Oil Flow

Adding to the geopolitical backdrop, the U.S. Treasury Department announced sanctions on 22 foreign companies alleged to be involved in enabling the sale of Iranian crude. The move aims to reassert pressure on Tehran’s energy revenues, coming just weeks after President Donald Trump unexpectedly signaled leniency toward Chinese imports of Iranian oil. While the sanctions initially soothed market concerns around U.S. energy policy inconsistency, analysts remain skeptical. "Until there is a clear, measurable drop in Iranian exports, these sanctions won’t push prices meaningfully higher," said Joe DeLaura, Global Energy Strategist at Rabobank.

Red Sea Tensions Fail to Move Markets

Meanwhile, escalating Houthi attacks on cargo vessels in the Red Sea — a critical global oil transit route — have yet to meaningfully impact oil pricing. “Most shipping is already rerouted,” noted Rebecca Babin, Senior Energy Trader at CIBC Private Wealth Group, minimizing short-term supply disruptions. As traders continue to navigate mixed signals, oil markets remain on edge but largely stable.

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