Crude Holds Above $105 as IEA Warns April Supply Losses Will Double March

From Ceasefire Hopes to Stone Ages

WTI had a violent session on April 1. The EIA's weekly report showed a 5.5 million barrel crude inventory build — the largest in weeks — and crude dropped toward $97 during the regular session. Relief briefly compounded when Trump told reporters that Iran had requested a ceasefire and the war could end within two to three weeks. Iran's foreign minister promptly denied any negotiations were taking place.

Then came the primetime address. On Day 33 of Operation Epic Fury, Trump's first formal speech to the nation offered no exit strategy: "We are going to hit them extremely hard over the next two to three weeks. We are going to bring them back to the Stone Ages." This is his third timeline shift since the war started February 28 — initially four days, then three weeks, now two to three more. WTI gapped from $100 to above $105 overnight, and Brent jumped nearly 6% to above $107.

The April Supply Cliff

The reason the bid held and extended past $105 into April 2 isn't just the speech — it's the structural supply picture getting materially worse. IEA Executive Director Fatih Birol warned on April 1 that April supply losses will be double March's: "In March there were already some cargo ships carrying oil and gas that transited through the Strait of Hormuz before the war broke out and are still coming to ports. In April, there is nothing."

The numbers back him up. The Strait of Hormuz, which normally handles roughly 20 million barrels per day, has seen traffic collapse by over 90% since Iran declared the strait closed on March 4. Gulf Arab production has fallen by at least 10 million barrels per day. The IEA has called it the largest supply disruption in the history of the global oil market — bigger than the 1970s oil crises combined.

Can Strategic Reserves Contain It?

The IEA's 32 member countries have already released a record 400 million barrels from strategic reserves — the largest coordinated release in the organization's 52-year history, with the U.S. contributing 172 million barrels. Birol indicated the IEA is weighing another release. But analysts have been skeptical: 400 million barrels covers roughly 20 days of normal Hormuz flows, and the strait isn't reopening soon.

Goldman Sachs raised its April Brent target to $115 and estimates $14 per barrel of war premium remains in crude. Their base case assumes roughly six weeks of Hormuz disruption, with prices falling back to $80 by year-end if supply normalizes. Week five is underway. The market is running out of time for the optimistic scenario.

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