U.S.-Iran Negotiations: Iran criticized new U.S. sanctions on its energy sector, calling them evidence of Washington's lack of seriousness about nuclear negotiations. The sanctions, which target a major Iranian LPG magnate, are part of the Trump Administration maximum pressure strategy aimed at faltering Iran's oil exports. Iran's Foreign Ministry said the move contradicts U.S. claims of wanting dialogue. Despite the tensions, Iran and the U.S. are set to begin high level and expert level nuclear talks this Saturday in Oman. Iranian Foreign Minister Abbas Araqchi expressed cautious optimism, stating that progress is possible if the U.S. avoids unrealistic demands.

Russia Ukraine War: Ceasefire talks in London have been downgraded, with key U.S. figures Marco Rubio and Steve Witkoff withdrawing, leaving the meeting to proceed at a technical level with UK, French, German, Ukrainian, and U.S. officials. Instead, Witkoff will meet with Vladimir Putin in Moscow, signaling a shift in diplomatic priorities. Speculation has emerged that Russia might accept a ceasefire along current frontlines in exchange for recognition of its hold over Crimea, something President Zelensky firmly rejected. Amid these uncertain diplomatic moves, Russia resumed its attacks on Ukraine after a brief Easter truce, including a deadly drone strike in Marhanets and attacks on infrastructure in Kherson. The U.S. decision to pull back from London talks may reflect an expectation that Ukraine would not accept the latest ceasefire proposals. Despite talks continuing at an official level, the lack of progress and clarity highlights ongoing deadlock, with both military and humanitarian costs continuing to mount.

U.S. Weekly Energy Stocks: API Energy Stocks Tuesday afternoon reported a draw in crude stocks of 4.6 million barrels, a draw on distillate stocks of 1.6 million barrels, and a draw on gasoline of 2.2 million barrels .The latest poll for EIA Energy Stock report, being released at 9:30am CST today, is calling for a draw in crude of 1.455 million barrels, a build on distillates of 208,000 barrels, and a draw on gasoline of 1.288 million barrels. 

Market Overview: The energy sector is starting out with little movement compared to the beginning of the week with the crude oil market making a modest rebound yesterday influenced by geopolitical developments and supply dynamics.​The energy market has been driven by new U.S. sanctions on Iran's energy sector and a larger than expected drawdown in U.S. crude inventories, reported by Reuters early today. The U.S. Energy Information Administration anticipates an increase in global oil inventories and subdued demand growth. Market sentiment is also being shaped by easing U.S. monetary policy tensions and hopes for de-escalation in U.S.-China trade relations, which are providing some support to oil prices amid broader economic uncertainties. Energy futures are bearish mid week with crude down $0.37 to $63.30, HO is down $0.0080 to $2.1406, and RBOB is down $0.0028 to $2.0968.

As of April 2025, the U.S. Strategic Petroleum Reserve holds approximately 395 million barrels of crude oil, significantly below its authorized capacity of 714 million barrels per the Department of Energy. This reduction follows emergency drawdowns totaling around 300 million barrels during the Biden administration, primarily in response to the 2022 energy crisis. The Trump administration has prioritized refilling the SPR to capacity, estimating that this effort could take several years and cost up to $20 billion. Recent solicitations have been issued for additional oil purchases, including up to 3 million barrels for delivery between April and May 2025. Despite these efforts, the SPR remains at its lowest level since the 1980s, underscoring the challenges in restoring it to full capacity. The Trump Administration is dedicated to fill the SPR as soon as possible.

The energy complex started out with little to no movement to start out the day, however finished bearish driven by market anticipation of a potential OPEC+ production increase in June amid internal tensions. This decline follows a recent peak of $64.18 a barrel for crude oil earlier in the week, influenced by U.S. sanctions on Iran and a surprising drop in inventories as the DOE report came out this morning. Despite a surge in U.S. crude production to 13.5 million barrels per day, the market remains cautious due to the possibility of further output hikes by OPEC+. At the end of today crude oil is down $1.10 to $62.27 a barrel, HO down to $2.1269, and RBOB down to $2.0839.