Key facts
- Brent crude futures surpassed $95 a barrel.
- WTI crude oil futures settled at $92.16 per barrel, a 5.49% increase.
- The Strait of Hormuz is effectively shut, constraining shipments.
- Gasoline stocks are at their lowest level since 2014.
- U.S. crude exports reached a record 5.6 million barrels per day in May.
- Guyana's oil production is nearing 1 million barrels per day.
- Copper prices climbed, nearing $14,000 a ton.
- Aluminum prices reached their highest point in over four years.
- Companies will return 40 million barrels to the U.S. Strategic Petroleum Reserve.
- U.S. oil rigs increased for the seventh consecutive week.
- Norway averted a potential offshore strike after a wage deal was reached.
Oil futures have seen significant price swings, with Brent crude surpassing $95 a barrel and WTI crude futures reaching highs of $94.00 and $97.00, eventually settling at $92.16 per barrel. These movements are largely driven by escalating geopolitical tensions in the Middle East, particularly involving the U.S. and Iran, and disruptions in the Strait of Hormuz. The Strait of Hormuz closure has constrained shipments and created a firm bid for industrial metals like copper, which neared $14,000 a ton, and aluminum, which hit a four-year high.
Supply concerns are exacerbated by depleted commercial inventories and OPEC spare capacity, with a structural supply disruption creating an estimated deficit of around 5 million barrels per day. Gasoline stocks are at their lowest level since 2014, and crude inventories continue to fall, with Cushing nearing tank bottoms. U.S. crude exports reached a record 5.6 million barrels per day in May, driven by demand from Asian and European refiners. Guyana's oil production capacity is nearing 1 million barrels per day, with current output over 900,000 barrels per day, benefiting from higher global prices.
Geopolitical events have directly impacted supply and market sentiment. Strikes involving the U.S. and Iran, along with Hezbollah rejecting a U.S.-brokered ceasefire, have contributed to price increases. An explosion at Oman's Mina al Fahal terminal briefly disrupted loadings, though operations have since normalized. Tanker traffic has partially recovered to an estimated 60-70% of pre-war levels, reflecting a more fragmented shipping environment, with Iranian exports reportedly decreasing by approximately 90%. Companies that borrowed crude from the U.S. Strategic Petroleum Reserve will return 40 million barrels as a premium after the conflict in Iran concludes.
Looking ahead, an analyst predicts crude oil prices could fall to $85 per barrel and gasoline prices to $4 per gallon if a peace deal with Iran is reached. Norway has averted a potential offshore strike after a wage deal was reached, which could have impacted energy supplies. U.S. oil rigs have increased for the seventh consecutive week, the longest streak since 2022, signaling potential shifts in drilling activity. Australia's Dorado oil project may reach a final investment decision in late 2027, with Carnarvon Energy Ltd holding a 10% stake.