Oil Holds Four-Day Rally on Trade Hope and Iran Tension

​Oil prices are staying strong, riding the momentum of their biggest four-day rally since last October. West Texas Intermediate held above $63 and Brent crude hovered near $66 as markets digested two powerful forces: a thaw in U.S.–China trade tensions and a fresh round of geopolitical heat with Iran.

The rally was sparked by the 90-day U.S.–China tariff truce and reinforced by President Trump’s hardline stance on Iranian oil exports. During a visit to Saudi Arabia, Trump reiterated that Tehran will not be allowed to develop nuclear weapons and warned he’d drive Iranian oil exports to zero if no new nuclear deal is reached. This came alongside new U.S. sanctions targeting a shipping network allegedly moving billions in Iranian crude.

The rhetoric is rattling markets already dealing with tight supplies and cautious sentiment. While trade optimism has lifted broader risk appetite, analysts say the Iran risk premium is back in play. Trump's remarks suggest continued friction in the Persian Gulf, with possible disruptions to oil flows if tensions flare further.

Still, not all signals are bullish. U.S. crude inventories rose by 4.29 million barrels last week, according to the American Petroleum Institute—potentially the largest build since March. That unexpected uptick tempered some of the momentum, keeping prices from climbing further.

OPEC+, meanwhile, is pushing to increase production at its upcoming June 1 meeting. Saudi Arabia has signaled support for boosting output to discipline non-compliant members, which could add to fears of an oversupplied market if demand softens.

​Bottom line: Oil’s rebound has legs—for now. But with trade diplomacy still fragile, sanctions heating up, and supply dynamics shifting, energy markets are walking a fine line between relief and renewed volatility.