Oil Surges as Hormuz Supply Risks Regain Strength
Oil prices rallied on Monday (May 11), fueled by supply concerns after US President Donald Trump called Iran's response to the US proposal "unacceptable," while the Strait of Hormuz remained largely closed, keeping global markets tight. This rally came a day after sentiment surrounding a ceasefire had weighed on prices the previous week.
Brent crude rose $4.04, or 3.99%, to $105.33 per barrel at 06:14 GMT, while WTI crude gained $4.43, or 4.64%, to $99.85. Last week, both contracts recorded weekly declines of around 6% on hopes that the 10-week conflict would soon subside and oil transit through Hormuz could resume.
Price movements reaffirmed the highly headline-driven nature of the oil market, with volatility driven by any hint of resistance or warning from Washington or Tehran. Market focus now turns to Trump's visit to Beijing on Wednesday, which US officials said would include discussions on Iran, amid expectations that China could push for a ceasefire and a return to flows in Hormuz.
From a fundamental perspective, supply disruptions are already impacting market balance: Saudi Aramco CEO Amin Nasser said the world has lost about 1 billion barrels of oil in the past two months and that energy markets will need time to stabilize even if flows return to normal. Kpler shipping data also showed three crude tankers leaving Hormuz last week with their trackers turned off to avoid Iranian attacks, signaling efforts to maintain Middle Eastern exports amid security risks.
ANZ believes the geopolitical risk premium is likely to remain embedded in prices, with Brent projected to remain above $90 per barrel throughout 2026 and around $80–$85 in 2027 as demand growth recovers and inventories rebuild. On the demand side, Chinese oil imports are said to have fallen to a nearly four-year low in April, demonstrating how supply disruptions and trade flow conditions are influencing market dynamics.
Source: Newsmaker.id
