Iran Conflict Drives Volatility, DAPL Premium for Bakken Crude

Oil markets experienced significant volatility Tuesday as geopolitical tensions surrounding Iran continued to disrupt global trade, according to Rigzone. Post-settlement trading saw prices whipsaw after U.S. President Donald Trump extended a ceasefire but maintained a naval blockade of the Strait of Hormuz.

The blockade aims to cripple Iran's economy by halting its oil and gas exports, Rigzone reported. Iran has maintained a tight grip on traffic through the strait, a chokepoint for about a quarter of the world's seaborne oil trade. The impact of the conflict is expected to continue for months even after any deal, with some traders warning flows through the waterway may never return to normal.

Prices surged briefly Tuesday after reports that U.S. Vice President JD Vance scrapped a trip to Islamabad for peace talks and Iran refused to attend, Rigzone stated. The now seven-week-old conflict has left oil traders bullish but without conviction that a deal is imminent, as both warring parties have claimed the other violated ceasefire terms.

For Bakken operators, the global disruption is translating into a direct price benefit for crude shipped via the Dakota Access Pipeline (DAPL). Bing News reported that North Dakota oil is fetching a $7 premium over the West Texas Intermediate (WTI) benchmark price due to the Iran war.

The global benchmark, Brent crude, edged up 3.1% to settle at $98.48 a barrel on Tuesday, Rigzone said. WTI for June delivery settled 2.6% higher at $89.67 a barrel in New York. The less-active May contract, which expired Tuesday, settled at $92.13.

The negotiations had been seen as a last chance for de-escalation before a two-week truce ends Wednesday, and to clarify whether oil tankers will soon be able to transit the Strait of Hormuz, Rigzone reported. Unresolved issues include the Islamic Republic's nuclear capabilities and Israel's invasion of Lebanon.

The sustained premium for DAPL-shipped crude underscores the pipeline's critical role in providing Bakken producers access to markets less dependent on volatile international shipping routes affected by the Hormuz blockade. The situation highlights the strategic value of inland pipeline infrastructure during global supply disruptions.