Brent Crude Hits $100 Again on Iran Strikes, May 26

Brent crude oil surged nearly 4% to $100 per barrel on May 26 after US military strikes on Iranian missile sites dashed hopes for a quick peace agreement. Oil had fallen below $100 the day before on reports of progress in US-Iran negotiations. The volatile swings reflect trader uncertainty about whether the Strait of Hormuz will reopen, a critical shipping route for global energy supplies.

Oil Swings on Geopolitical Tensions

Brent crude traded around $100 per barrel on May 26, gaining almost 4% after US strikes on Iranian missile launch sites and mine-laying vessels near the Strait of Hormuz. The previous day, oil had fallen to $97 per barrel as traders bet on a diplomatic breakthrough. Overnight attacks and Iran’s defiant rhetoric reversed those gains, with Iranian supreme leader Mojtaba Khamenei stating that Gulf powers will no longer shield US bases in the region.

Peace Deal Remains Fragile

The US and Iran have been negotiating a memorandum of understanding that could include a 60-day ceasefire extension and reopening of the Strait of Hormuz. However, the Brent crude oil price ended the week down 6% at just below $100 per barrel as doubts emerged. Secretary of State Marco Rubio said talks may take several more days. The thorniest issue remains Iran’s nuclear programme, which both sides struggle to resolve.

Global Oil Inventories at Risk

Weeks of disruption to oil exports through the Strait of Hormuz have heavily eroded global crude and fuel stockpiles. Analysts at HFI Research warned the market has reached the point of no return and could face a rude awakening by early June. The International Energy Agency chief said the world could hit a red zone in July and August if production fails to match demand during peak summer travel season. UK household energy bills are set to climb by nearly 13% under the government’s price cap, adding £209 per year to typical dual-fuel costs from July.

Markets React to Energy Uncertainty

UK equities gained 2.7% last week on oil price declines and peace deal optimism, but momentum stalled on May 26 after fresh tensions. European equities rose 2.1% as energy-dependent regions benefited from lower crude prices. Global equities gained 1.3% in local currency terms but only 0.6% in sterling terms. WTI crude fell nearly 8% over the week, supporting inflation expectations and interest rate outlook.

Final Thoughts

Brent crude remains trapped between geopolitical risk and inventory depletion. With oil near $100 and peace talks fragile, investors face continued volatility until the Strait of Hormuz reopens or tensions escalate further.

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