HOUSTON, May 15, 2026, 14:02 CDT
- Brent crude moved near $109 a barrel as U.S.-Iran diplomacy again looked stuck.
- Stocks and bonds sold off as investors priced in a longer energy shock.
- U.S. gasoline costs are already above $4.50 a gallon on average, adding pressure on the White House.
Oil prices jumped more than 3% on Friday after President Donald Trump said he was running out of patience with Iran, reviving fears that fighting could resume and keep the Strait of Hormuz, the Gulf waterway used for about a fifth of global oil and liquefied natural gas shipments, largely shut. Brent crude, the main international oil benchmark, rose to $109.07 a barrel, while U.S. West Texas Intermediate climbed to $105.02.
The move matters now because the market had been betting on at least some progress after Trump’s talks with Chinese President Xi Jinping in Beijing. Instead, traders saw a thinner path to a deal, more risk for tankers, and a fresh inflation shock landing just as U.S. pump prices have become a political problem.
“The tone between the U.S. and Iran has once again become significantly more confrontational,” Commerzbank analysts said, adding that hopes for a quick reopening of the strait had faded even though the ceasefire still held. Brent is now up more than 7% this week and WTI more than 10%, Reuters reported. Reuters
Trump told Fox News he was “not going to be much more patient” and said Iran “should make a deal.” He also said the U.S. and China agreed Iran should not obtain a nuclear weapon and that the strait should reopen, though Beijing gave no public sign it would pressure Tehran. Reuters
Iranian Foreign Minister Abbas Araqchi said Tehran had “no trust” in Washington and would negotiate only if the United States was serious. He said Iran was ready for diplomacy, but also ready to resume fighting, and that ships not linked to states attacking Iran could use the strait if they coordinated with Tehran. Reuters
The energy shock spilled into stocks and bonds. Longer-dated U.S. Treasury yields rose to their highest levels in about a year, with the 10-year yield at 4.568% and the 30-year at 5.112%, as traders worried that oil-driven inflation could keep the Federal Reserve tighter for longer.
Wall Street also slipped from records, with the S&P 500 down 0.8%, the Dow off 390 points and the Nasdaq lower by 0.9% in early afternoon trading, AP reported. Nvidia fell 2.9%, making AI-linked shares part of the selloff rather than a shelter from it.
“Market focus is back on the deadlock and a blockaded Strait of Hormuz, with a tail risk of renewed military escalation,” said Vandana Hari, founder of Vanda Insights. Saxo Bank analyst Ole Hansen said crude was higher because the Trump-Xi meeting did little to move the market closer to a reopening, while Ukrainian attacks on Russian refineries added another supply worry. Reuters
There were signs of limited traffic. Iran’s Revolutionary Guards said 30 vessels crossed the strait between Wednesday evening and Thursday, while shipping analytics firm Kpler said 10 ships had passed in the previous 24 hours, more than the five to seven seen daily in recent weeks. PVM analyst Tamas Varga said the increase was helping sentiment more than the actual oil balance.
The White House is already looking for ways to blunt the pain at the pump. Reuters reported on Thursday that Trump backed suspending the federal gasoline tax, an 18-cent-a-gallon levy, with regular fuel averaging more than $4.50 nationwide and prices up 50% since the start of the war.
The risk is that the squeeze either eases fast or gets worse quickly. More safe tanker crossings could knock some fear premium out of crude, but the U.S. Energy Information Administration now assumes the strait will be effectively closed through the end of May; if that lasts through June, the agency said oil prices would be about $20 a barrel higher in the near term than its current forecasts.
Gulf producers are trying to work around the chokepoint. The United Arab Emirates said it would speed construction of a new pipeline to double export capacity through Fujairah by 2027, while Saudi Aramco has used its East-West pipeline to keep part of Saudi exports flowing outside the strait.
“The world has consumed its oil safety net at a historic rate,” Phil Flynn, senior analyst with Price Futures Group, wrote in a note. A longer closure, he said, could mean tighter physical markets, refined fuel shortages and more upward pressure on prices in the coming weeks and months. Reuters
