Escalation or de-escalation? The oil market remains undecided and reacts violently to every Middle East headline. The US seizure of an Iranian tanker pushes Brent higher, while NATO discussions about escorting ships through the Strait of Hormuz push North Sea crude lower. The White House's rhetoric continues to add volatility.

US President Donald Trump alternates between threatening Iran — saying "the clock is ticking" — and reportedly cancelling a ready order to resume strikes at the request of Saudi Arabia, the UAE, and Qatar, the states most affected by Iran's retaliatory actions. Those governments have a clear incentive to press the US for an extension of the ceasefire. Trump also reiterated his usual line that any armed conflict would end quickly and that Iran wants a deal.

There is a feeling of deja-vu. The oil market is looping: Brent rallies are supported by rapidly falling inventories, while Trump's comments periodically trigger sell-offs. It feels like we have been here before — and could be headed toward a renewed escalation.

Chinese refining throughput dynamics

Do not rely on inventories alone. The US keeps ramping up oil exports despite a fifth straight week of inventory draws. Bloomberg forecasts an additional 9.1m barrels of stock draws, the largest since September. China is cutting imports, which shows up in refining: throughput fell by 11% in April to 54.55 million tonnes, with utilisation of refinery capacity at 67%, the lowest reading since records began in 2021.

At the same time, the US extended permission to buy Russian crude that is already loaded on tankers (the previous waiver expired on May 17). Given the current market structure, sidelining one of the world's largest producers could send Brent toward record highs — an outcome Washington wants to avoid. The UK followed the US and authorised purchases of Russian petroleum products.

In short, Americans are influencing global supply, while China is affecting demand — both actions are cushioning the global economy. Still, a sharp rise in yields threatens a recession and lower global oil consumption. That cyclical constraint implies an upper bound on prices; whether that cap holds will depend on developments ahead.

Technically, the daily chart shows that Brent's inability to overcome the fair-value area at $111/bbl increases the risk of a 1-2-3 reversal pattern forming. The pivot level to watch is $105.80 — a break below it would support a continued pullback and validate selling pressure. Conversely, a rebound off that pivot would be a reason to build long positions.