Iran’s Nuclear Sites: A fragile ceasefire has taken hold between Iran and Israel after 12 days of intense conflict, brokered by U.S. President Donald Trump. The U.S. joined the war by striking Iranian nuclear facilities with bunker-buster bombs, though a preliminary intelligence assessment suggests the attacks only temporarily set back Iran’s nuclear program by one to two months. Trump claimed the strikes "obliterated" Iran’s capabilities, but the Defense Intelligence Agency reported otherwise, noting key infrastructure remained intact. Both Iran and Israel declared victory and lifted civilian restrictions, reopening airspace and airports. Despite agreeing to the truce, each side accused the other of violating it shortly after it began, prompting Trump to harshly rebuke both nations, especially Israel, for continued aggression. Iranian President Pezeshkian expressed readiness to resolve tensions with the U.S., while Israeli leaders vowed to remain vigilant against future threats. The war left over 600 Iranians and 28 Israelis dead, marking the first significant breach of Israeli air defenses by Iran. Oil prices dropped and global markets rallied, reflecting relief that the conflict had not escalated further or disrupted energy supplies.

U.S. Weekly Energy Stocks: API Energy Stocks Tuesday afternoon reported a draw in crude stocks of 4.230 million barrels, a draw on distillate stocks of 1.030 million barrels, and a build on gasoline stocks of 764,00 barrels. The latest poll for EIA Energy Stock report, being released at 9:30am CST today, is calling for a draw in crude stocks of 797,00 barrels, a build on distillates stocks of 410,000 barrels, and a build on gasoline stocks of 381,000 barrels. 

China: President Donald Trump stated that China can continue purchasing Iranian oil following a ceasefire between Israel and Iran, though the White House clarified this does not signal a loosening of U.S. sanctions. His comments contributed to a nearly 6% drop in oil prices, as markets interpreted them as a potential shift in enforcement. Trump emphasized Iran’s restraint in not closing the Strait of Hormuz, which is critical for Chinese oil imports, and urged China to also buy more U.S. oil. Despite previous sanctions targeting Chinese refiners for importing Iranian crude, experts say Trump’s stance reflects weakened enforcement rather than formal policy change. Analysts believe China’s near term oil trade with Iran or the U.S. will remain largely unchanged due to tariffs and economic interests. China's foreign ministry responded that it would act based on its own energy needs, while U.S. officials hinted at complex interagency steps if Trump moves to suspend sanctions.

Market Overview: Crude prices fell sharply this week, dropping nearly 6% following a ceasefire between Iran and Israel and President Trump’s comments allowing China to continue purchasing Iranian oil. Market sentiment remains bearish due to increased geopolitical uncertainty and perceived weakening of U.S. sanctions enforcement. Chinese demand for discounted Iranian crude is steady, while U.S. exports to China remain limited by tariffs and price competitiveness. The global supply outlook is stable, but ongoing conflicts and weather risks, especially the active hurricane season, pose potential short term disruptions. Refiners are closely watching developments in the Middle East and U.S. policy signals for direction on crude sourcing and price stability. Energy futures are seeing its first bullish look of the week as crude is up $0.60 to $64.97, HO is up $0.0184 to $2.3035, and RBOB is up $0.0068 to $2.0925.

The Strait of Hormuz remains one of the world’s most critical oil chokepoints, connecting the Persian Gulf with the Gulf of Oman and facilitating large scale crude oil transit. In 2024, an average of 20 million barrels per day barrels per day of petroleum passed through the strait, accounting for roughly 20% of global petroleum liquids consumption. First quarter 2025 flows stayed relatively flat, despite heightened regional tensions. Although no maritime disruptions have occurred, Brent crude prices rose from $69 a barrel on June 12 to $74 a barrel on June 13, reflecting market sensitivity to the strait's vulnerability. The decline of 1.6 million barrels per day in crude and condensate flows from 2022–2024 was driven by OPEC+ output cuts and rerouting by Saudi Aramco via the East-West pipeline due to Bab al-Mandeb disruptions. Refining capacity expansions in the Gulf also increased domestic crude use, reducing exports. Saudi Arabia remained the top user of the strait in 2024, contributing 5.5 million barrels per day, or 38% of crude exports through Hormuz.