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diplomacyMay 12, 2026

Why are oil prices up today, and will Brent crude futures and US WTI rates rise sharply in near future? Oil rises as supply fears return

Summary

Why are oil prices up today, and will Brent crude futures and US WTI rates rise sharply in near future?Oil prices rose about two percent as hopes for a deal to end the conflict between the United States and Iran weakened. Brent crude futures climbed to about $106 per barrel. US West Texas Intermediate rose to about $100 per barrel. Both benchmarks had already gained nearly three percent in the previous session. US President Donald Trump said the ceasefire with Iran was on life support. He highlighted disagreements about stopping hostilities, removing a naval blockade, restarting Iranian oil sales, and paying compensation for war damage. Iran also stressed its control over the Strait of Hormuz. This route carries about one fifth of global oil and liquefied natural gas shipments. Traders fear disruptions could restrict supply and raise prices. Why are oil prices up today?Supply concerns returned as shipping risks near the Strait of Hormuz increased. Some producers reduced exports after the near-closure of the route. A survey showed that OPEC oil output in April fell to its lowest level in more than two decades. Saudi Aramco leadership warned that disruptions in the strait could delay market stability until 2027. The loss could reach about 100 million barrels of oil per week. This warning added pressure to prices and raised long-term supply fears. US crude inventory data also supported higher prices. Analysts expect US crude stocks to fall by about 1.7 million barrels. Strong export flows continue to move oil and refined products across global markets. Lower inventories signal strong demand and tighter supply. Will Brent crude futures and US WTI rates rise sharply in near future?Analysts say prices could rise further if no peace deal emerges by the end of May. One energy expert said a breakthrough could cause an $8 to $12 price correction. However, any escalation or renewed blockade threats could push Brent toward $115 per barrel. Market participants now watch the planned meeting between US President Donald Trump and Chinese President Xi Jinping. The United States recently imposed sanctions on individuals and companies accused of helping Iranian oil shipments to China. Tariffs from the trade war have already stopped most Chinese imports of US oil and liquefied natural gas. These imports were worth $8.4 billion in 2024. The meeting could influence global trade and energy demand. Traders expect discussions about tariffs, rare earths, Taiwan, and the conflict in Iran. These topics may affect oil demand and supply flows. Analysts insights and market outlookAnalysts say markets are in a wait and see phase. Weekend optimism about peace talks ended when the US president rejected Iran’s counter offer. The ceasefire now looks weak. The Strait of Hormuz remains mostly closed to tanker traffic. Energy experts warn that markets depend on the assumption that the strait will reopen before late June. If disruption continues, oil prices could rise sharply. This scenario could tighten financial conditions and create economic pressure worldwide. Stock markets showed mixed reactions. Some Asian markets declined due to uncertainty. Seoul markets dropped after proposals for an AI social tax. Indonesia markets fell after currency weakness. Meanwhile Tokyo markets closed higher after currency policy coordination between Japan and the United States. What should investors do now?Investors continue to monitor supply risks, inventory data, and diplomatic developments. Oil prices react quickly to geopolitical news and trade policies. Traders expect strong volatility in the coming weeks. Energy markets now focus on the duration of the conflict and the reopening of shipping routes. If supply disruptions continue, prices may rise further. If negotiations succeed, prices could fall quickly. Investors track inventory data, shipping updates, and policy announcements to guide decisions. Broader impact on global economyHigher oil prices can influence transport costs, inflation, and trade. Many countries depend on stable energy supply. Disruptions may increase fuel costs and affect economic growth. Central banks and governments also watch oil prices because they affect inflation and currency values. The coming weeks may determine whether markets stabilise or remain volatile. FAQs Q1. Why are oil prices rising despite no major supply cut announcement? Oil prices rise due to fears of supply disruption in the Strait of Hormuz, falling US inventories, reduced OPEC output, and stalled peace talks that raise risks to global oil shipments. Q2. Could oil prices fall if diplomacy improves soon? Yes. Analysts say a peace deal or reopening of shipping routes could cause a sharp correction in oil prices, especially if supply fears reduce and exports resume normally. (You can now subscribe to our Economic Times WhatsApp channel) (Catch all the US News, UK News, Canada News, International Breaking News Events, and Latest News Updates on The Economic Times.) Download The Economic Times News App to get Daily International News Updates. (You can now subscribe to our Economic Times WhatsApp channel) (Catch all the US News, UK News, Canada News, International Breaking News Events, and Latest News Updates on The Economic Times.) Download The Economic Times News App to get Daily International News Updates.

Perspectives

Iranian Official

The Iranian government has asserted its sovereign right to control the Strait of Hormuz against US foreign aggression and naval blockade, which threatens one-fifth of global energy shipments and has driven Brent and WTI crude prices up nearly five percent amid stalled ceasefire talks. Resistance to American demands on halting hostilities, resuming restricted oil exports, and unpaid war damages underscores Tehran's firm stance, with OPEC output already at multi-decade lows due to these external pressures.

Israeli

Iran's threats to choke the Strait of Hormuz expose the regime's core strategy of using proxy networks to strangle global energy flows and endanger Israel's survival. Weakening US-Iran ceasefire prospects, amid disputes over naval blockades and oil exports, underscore the necessity of Israel's defensive operations to dismantle these layered threats before they trigger wider supply shocks.

Neutral

Oil prices rose about two percent, with Brent crude futures reaching approximately $106 per barrel and US West Texas Intermediate at about $100 per barrel. The increases followed statements by US President Donald Trump that a ceasefire with Iran remained in doubt amid disagreements on ending hostilities, lifting a naval blockade, resuming Iranian oil exports, and war damage compensation, as well as Iranian emphasis on control of the Strait of Hormuz. Market commentary also referenced reduced OPEC output, shipping risks near the strait, and expected declines in US crude inventories.

Western

Oil prices climbed nearly 2% as Iranian threats to close the Strait of Hormuz undermined ceasefire prospects, with President Trump noting persistent disagreements over ending hostilities, lifting the US naval blockade, and halting Tehran’s oil exports. From a Western perspective, US and allied forces are prioritizing precision operations to neutralize Iranian disruption risks to 20% of global energy transit, ensuring strategic freedom of navigation and long-term supply stability. OPEC’s record-low output and projected US inventory draws reinforce the need for sustained deterrence against such threats.

Pro-Peace

Escalating US-Iran hostilities, including naval blockades and threats to the Strait of Hormuz, have driven oil prices up nearly 5% as supply fears mount, imposing severe humanitarian costs on civilians worldwide through soaring energy expenses and economic hardship. These tensions, marked by stalled ceasefires and compensation disputes, risk disrupting one-fifth of global shipments and could cost 100 million barrels weekly, worsening suffering for vulnerable populations already strained by conflict. Diplomatic alternatives—such as resuming talks to end hostilities, lift blockades, and restart Iranian oil sales—offer a path to de-escalation that prioritizes civilian lives over military brinkmanship.

Global South

Oil prices climbed nearly 2% amid fraying US-Iran ceasefire talks, driven by disputes over Iran's sovereign right to lift its naval measures in the Strait of Hormuz and resume oil exports without external diktats. From a Global South vantage, the standoff exposes neo-colonial patterns where Washington’s pressure on energy routes threatens supply security for developing nations while shielding its own interests. Institutional failures, from broken de-escalation pledges to OPEC’s constrained output, underscore how such conflicts perpetuate market volatility at the expense of non-aligned economies.

Actors involved

USIranChina

Sources

  • Gandharv WaliaBy Gandharv Walia

    Why are oil prices up today, and will Brent crude futures and US WTI rates rise sharply in near future?Oil prices rose about two percent as hopes for a deal to end the conflict between the United States and Iran weakened. Brent crude futures climbed to about $106 per barrel. US W…

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