Rising Turbulence in Oil Markets as UAE Exits OPEC+ and Strait Fees Emerge
FastBull FeaturedSummary:
Iran’s Revolutionary Guard claims permanent control over the Strait of Hormuz; the UAE will exit OPEC and OPEC+ starting Friday.
Top News Highlights
1. The U.S. bans its individuals and entities from paying transit fees to Iran for the Strait of Hormuz
2. The U.S. Department of Defense formally applies to be renamed the Department of War
3. Iran’s Revolutionary Guard claims permanent control over the Strait of Hormuz
4. Ukraine’s parliament approves a 90-day extension of martial law
5. U.S. gasoline prices rise to the highest level in nearly four years; Trump’s approval rating hits a new low
6. The UAE will exit OPEC and OPEC+ starting Friday and gradually increase oil production
7. U.S. consumer confidence unexpectedly rises in April, supported by job prospects
8. U.S. wheat prices hit the highest level since 2024 amid drought and fertilizer cost pressures
Detailed News
U.S. bans payment of Strait of Hormuz transit fees to Iran
On the 28th, the U.S. Treasury Department’s Office of Foreign Assets Control issued guidance prohibiting U.S. individuals and entities from paying transit or security fees to Iran for passage through the Strait of Hormuz. The guidance specifies that U.S. persons, financial institutions, and foreign entities owned or controlled by the U.S. may not directly or indirectly make such payments to the Iranian government or the Islamic Revolutionary Guard Corps.
U.S. Department of Defense formally seeks renaming to Department of War
The Pentagon has formally submitted a proposal to change its name to the Department of War, with estimated implementation costs exceeding $50 million. The Office of the General Counsel has issued the proposal, aiming to amend relevant laws to complete the renaming process.
Iran’s Revolutionary Guard claims permanent control over the Strait of Hormuz
On the 28th, the deputy commander of the IRGC Navy stated that Iran has achieved full control over the Strait of Hormuz and requires passing vessels to pay transit fees. Foreign ships must comply with Iranian regulations, including using Persian for communication. He added that without orders from Iran’s Supreme Leader and the will of its people, not even a single liter of oil would be allowed to pass through the Strait. Iranian forces remain on high alert, “with fingers on the trigger,” and are capable of countering any form of maritime blockade. He also declared that U.S. dominance in the Persian Gulf has come to an end.
Ukraine extends martial law by 90 days
According to Interfax-Ukraine, Ukraine’s parliament (Verkhovna Rada) voted on the 28th to extend martial law and general mobilization for another 90 days. President Volodymyr Zelensky submitted the proposal on the 27th, extending the period from May 4 to August 2. The measures passed with 315 and 304 votes respectively, both exceeding the required 226 votes. This marks the 19th extension since the escalation of the Russia-Ukraine conflict in February 2022.
U.S. gasoline prices hit a four-year high; Trump’s approval rating declines
Amid U.S.-Iran tensions, U.S. gasoline prices surged to their highest level in nearly four years. Data from the American Automobile Association shows average gasoline prices reached $4.18 per gallon, the highest since April 2022, with a 1.6% daily increase—the largest in over a month. Brent crude, the global benchmark, has risen in six of the past seven sessions and remains over 40% higher than pre-conflict levels in late February.
A recent poll shows declining public approval of President Trump, driven by dissatisfaction with his handling of the cost of living and the Iran conflict. Approval fell to 34%, down from 36% earlier in April. Only 22% approved of his handling of living costs. Since taking office in January 2025, his approval has steadily declined from 47%.
UAE to exit OPEC and OPEC+, increase oil production
The UAE announced it will exit OPEC and OPEC+ starting May 1 and gradually increase oil output. State news agency WAM reported that the move will help the country adapt to evolving demand and enhance policy flexibility while maintaining a responsible approach to market stability.
Bloomberg reported that a UAE state-owned oil company has informed some long-term clients that cargoes can be lifted via ship-to-ship transfers at Fujairah outside the Persian Gulf in May. This suggests UAE tankers have already bypassed the “dual blockade” by Iran and the U.S. through the Strait of Hormuz.
U.S. consumer confidence rises unexpectedly in April
Data released Tuesday showed U.S. consumer confidence unexpectedly edged higher in April, supported by improved labor market expectations. The Conference Board’s index rose to 92.8 from 92.2 in March, beating the median forecast of 89. While concerns over rising costs and Middle East tensions persist, the improvement may reflect a fragile ceasefire between the U.S. and Iran and signs of labor market stabilization. Hiring rebounded in March, and layoffs have remained limited.
U.S. wheat prices hit highest level since 2024
U.S. wheat prices surged to their highest level in nearly two years due to drought conditions and rising fertilizer costs. Chicago soft red winter wheat futures rose as much as 4.1%, reaching their highest level since June 2024. Crops in the Great Plains are suffering from lack of rainfall, with no clear signs of improvement. The USDA maintained its crop ratings, with only 30% rated good or excellent, while poor ratings increased. Persistent drought continues to cloud recovery prospects, according to No Bull Ag analyst Susan Stroud.
Today’s Focus
17:00 (UTC+8) Eurozone April Economic Sentiment Index
20:00 (UTC+8) Germany April CPI (preliminary, MoM)
20:30 (UTC+8) U.S. March Durable Goods Orders (MoM)
21:45 (UTC+8) Bank of Canada April Interest Rate Decision
22:30 (UTC+8) Bank of Canada Press Conference (Governor Macklem & Deputy Governor Rogers)
02:00 (UTC+8) Federal Reserve April Interest Rate Decision
02:30 (UTC+8) Federal Reserve Chair Powell Press Conference
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