Meanwhile, the API reports huge U.S. stock draws: File Image/Pixabay

With oil trading continuing to rise and fall to match the ebb and flow of hostilities between the U.S. and Iran, Brent on Tuesday took a 4 percent nosedive as U.S. military leaders said a ceasefire with the Islamic Republic remained in effect despite it launching attacks on the United Arab Emirates.

Brent fell to $109.87 after briefly touching $115 in the previous session; West Texas Intermediate fell 3.9 percent to $102.27 per barrel.

Deutsche Bank analysts wrote in a research note on Tuesday that headlines continue to drive the market, and that “Global market sentiment has made a cautious start to the week” as the U.S. and Iran “look to exert influence over the Strait of Hormuz.”

While downplaying the attacks on the UAE and stating that the ceasefire still held, U.S. defence secretary Pete Hegseth called the blockade of the Hormuz defensive and temporary.

Amid the flurry of headlines causing vertigo among the oil trading community, one news item coming late on Tuesday stood out: U.S. president Donald Trump announced that he was pausing the day-old U.S. operation to escort commercial ships through the Hormuz “for a short period of time,” citing “great progress” toward an agreement with Iran.

The move was also reportedly based on the request of Pakistan and other countries as well as “tremendous military success,” according to the brash billionaire.

However, although Project Freedom is on hold, the U.S. blockade of Iranian ports is still in place.

In other oil news on Tuesday, the American Petroleum Institute announced huge crude and oil product draws for the week ending May 1, to the tune of 8.1 million barrels for the former and 6.1 million barrels for gasoline, whose inventories as of last week were already 2 percent below the five-year average for this time of year..

Also on Tuesday, South Bow Corp. and Bridger Pipeline reportedly committed at least 400,000 barrels per day to kickstart the long-delayed push to move more crude from Canada into the U.S.; the level of commitment is consistent with what is typically required before infrastructure construction to facilitate oil transportation proceeds.

The project would reuse about 150 kilometres of disused pipe on the Canadian side and connect to a new 645-mile system through Montana to Guernsey, Wyoming; Washington has already approved a cross border permit for the project that reversed course from 2021 when the Keystone XL permit was scrapped..