Overview
- Brent and WTI fell sharply in May as reports of a tentative 60-day U.S.-Iran ceasefire reduced short-term risk premia, bringing Brent to about $90–$92 and WTI near $87 by May 31.
- Major agencies show massive recent withdrawals: the IEA recorded record monthly global draws in March and April and the U.S. has released about 50 million barrels from the Strategic Petroleum Reserve, leaving it near 365 million barrels.
- Senior oil executives warned at industry conferences that commercial and SPR buffers are approaching operational minimums and that breaching those floors could trigger a rapid jump in physical prices into triple digits within weeks.
- The Strait of Hormuz remains effectively closed, creating delayed loadings, higher insurance and shipping costs, and stranded barrels that mean Gulf flows and refinery restart timelines could drag on for months.
- Even if diplomacy leads to resumed shipping, analysts say logistics, refineries and tank scheduling will slow price relief and households can expect pump prices and inflationary pressure to adjust unevenly over months.