London, May 15, 2026, 18:18 BST
- Brent and WTI climbed after U.S.-Iran tensions dashed expectations for a swift reopening of the Strait of Hormuz.
- Lower U.S. crude and gasoline inventories figured into the mix, with tighter global supplies and Ukrainian attacks on Russian refineries also on traders’ radar.
- Prediction markets aren’t betting on a quick recovery for shipping through Hormuz just yet.
Oil climbed Friday, Brent hovering near $109 per barrel and U.S. West Texas Intermediate just under $105, as new remarks out of Washington and Tehran dampened expectations for a swift agreement to resume regular shipping in the Strait of Hormuz. Earlier, Brent had jumped over 3% and WTI surged upwards of 4%, Reuters noted.
This is significant: the Strait of Hormuz—the slim channel connecting Gulf suppliers with the world—has turned into the market’s key price trigger. Reuters noted that prior to the conflict, about 20% of global oil and LNG shipments passed through there.
Headline risk isn’t the story anymore. The International Energy Agency reported this week that global supply dropped by 1.8 million barrels per day in April, while worldwide inventories—including oil at sea—shrank by 250 million barrels across March and April.
President Donald Trump warned that his patience with Iran was wearing thin, claiming he and China’s Xi Jinping had reached an understanding: Tehran should reopen the strait. But China hasn’t said publicly it would urge Iran to act. On the other side, Iranian Foreign Minister Abbas Araqchi declared there’s “no trust” toward the U.S., though he left the door open for talks—as long as Washington shows it’s serious. Reuters
Crude prices continued to carry a risk premium—essentially, the markup traders add on fears of supply disruptions. According to Vandana Hari, who heads Vanda Insights, attention snapped back to the stalemate and the closed strait, with what she described as a “tail risk of renewed military escalation,” Reuters reported. Reuters
Some movement picked up on the water, though it barely eased market nerves. Iran’s Revolutionary Guards put vessel crossings at 30 between Wednesday night and Thursday—a number Reuters notes is sharply down from the pre-war average of 140 daily sailings. PVM’s Tamas Varga pointed out that sentiment was reacting more to the increased crossings than the actual oil supply.
Bulls found a bit of support from the U.S. inventory numbers. According to the Energy Information Administration, U.S. commercial crude stocks dropped 4.3 million barrels in the week ended May 8, landing at 452.9 million barrels. Gasoline inventories were also down, off by 4.1 million barrels—now sitting 5% below the five-year average for this period.
WTI, the U.S. benchmark, logged a bigger percentage gain than Brent, pointing to traders eyeing domestic supply strains before the summer driving season kicks in. Brent serves as the global benchmark, while WTI tracks U.S. crude priced at Cushing, Oklahoma.
Worries over supply extended beyond the Gulf. According to Reuters, Ukraine has doubled strikes against Russian refineries since the year began, drones disabling some 700,000 barrels per day of refining capacity from January through May. Saxo Bank’s Ole Hansen pointed to crude’s move higher, citing stalled momentum after the Trump-Xi summit and Ukraine’s ongoing refinery attacks.
Prediction markets weren’t betting on a quick resolution. According to Kalshi, the odds of Hormuz traffic getting back to normal before Aug. 1 stood at 37%, bumped up to 48% for before Sept. 1, and reached 60% for before Oct. 1. Over at Polymarket, traders only gave a 6% shot that flows would be restored by the end of May.
Oil bulls face the risk of a sharp reversal if shipping traffic picks up, negotiations restart, or elevated prices further erode demand. The IEA projects global oil demand will shrink by 420,000 barrels per day in 2026, with the heaviest drop in the second quarter.
Right now, scarcity is driving prices higher. Capital Economics is flagging the possibility that Brent shoots up to at least $140 a barrel if the strait stays shut and OECD stockpiles continue to drop at April’s rate. Their most dramatic scenario? Brent hovering around $150 all the way through 2027.
