Oil prices rose more than 1% as geopolitical supply concerns over Iran dominated the market.
2026-05-19 01:39:52
On Monday (May 18), international oil prices rose significantly during the US trading session, with an increase of more than 1%. Market concerns about potential oil supply disruptions due to the conflict with Iran outweighed reports that the US had agreed to temporarily waive sanctions on Iranian crude oil, becoming the main driving force behind the price increase.
As of 01:29 Beijing time, Brent crude futures rose approximately 1.17% to $110.44 per barrel; West Texas Intermediate (WTI) crude oil rose 1.50% to $102.54 per barrel. The two benchmark crude oil prices fluctuated wildly throughout the day, with the highest increase approaching 2%, indicating highly sensitive market sentiment.
Oil prices fell sharply around 10 p.m. on Sunday.
On Sunday (May 17) around 10 PM Beijing time, oil prices experienced a significant pullback, primarily driven by reports that the US had agreed to temporarily waive sanctions on Iranian oil during negotiations. The news from Iran's semi-official Tasnim news agency was seen by the market as a positive sign of easing short-term supply risks, triggering profit-taking by some long positions and a technical correction.
However, this decline was short-lived. As core geopolitical supply concerns regained momentum, oil prices quickly stabilized and rebounded significantly on Monday.
IEA warns of rapid inventory depletion.
International Energy Agency (IEA) Executive Director Fatih Birol stated during the G7 finance ministers' meeting in Paris that commercial crude oil inventories are rapidly declining due to conflict and disruptions to shipping in the Strait of Hormuz, with only a few weeks' worth of supply remaining. While the release of strategic petroleum reserves adds approximately 2.5 million barrels of supply to the market daily, these reserves are "not inexhaustible."
Birol emphasized that the energy market is facing "the biggest energy security threat in history."
Sanctions waiver news and negotiation deadlock
Iran's semi-official news agency Tasnim reported that the United States agreed to temporarily lift oil sanctions on Iran in the latest round of negotiations, but Tehran insists on the complete lifting of all sanctions as part of a comprehensive agreement. Pakistan, acting as a mediator, has forwarded Iran's revised proposal and warned both sides that "time is running out."
The latest tough statements from both sides have exacerbated uncertainty.
US President Trump warned Iran that "the clock is ticking" and urged it to act quickly or "there will be nothing left." He stated bluntly that the current ceasefire agreement is "life-sustaining" and called Iran's latest proposal "completely unacceptable."
Iran responded that the United States had not offered any substantial concessions, insisting on the complete lifting of sanctions, the end of the blockade, and compensation for war losses. It also warned that continued damage to oil infrastructure would have long-term impacts on global supply. These tough statements further amplified market concerns about a breakdown in negotiations and a prolonged conflict.
Other market factors amplify volatility.
While U.S. crude oil production has grown strongly, it is still insufficient to fully compensate for the potential supply gap of approximately 13 million barrels per day caused by the disruption of operations in the Strait of Hormuz. China's crude oil processing volume in April fell to its lowest level since August 2022, indicating demand-side pressure, but Asia remains a significant potential buyer of Iranian crude oil. The global economic outlook, inflationary pressures, and policy uncertainty are also contributing to the continued strength of oil prices at high levels.
Outlook and Risks
Given Trump's latest warnings and Iran's hardline stance, a breakthrough through Pakistan's mediation efforts is unlikely. If shipping through the Strait of Hormuz remains restricted, oil prices are likely to continue rising due to news-driven factors; conversely, if negotiations make substantial progress or more reserves are released, oil prices may experience a correction.
Currently, the fragile ceasefire and the tension over supply remain the dominant factors, with geopolitical risk premiums remaining high, and the oil market is expected to remain highly volatile in the short term. Investors need to continue to monitor the latest developments between the US and Iran, progress in the Pakistan mediation, IEA statements, and US crude oil inventory data.
As of 01:29 Beijing time, Brent crude futures rose approximately 1.17% to $110.44 per barrel; West Texas Intermediate (WTI) crude oil rose 1.50% to $102.54 per barrel. The two benchmark crude oil prices fluctuated wildly throughout the day, with the highest increase approaching 2%, indicating highly sensitive market sentiment.
Oil prices fell sharply around 10 p.m. on Sunday.
On Sunday (May 17) around 10 PM Beijing time, oil prices experienced a significant pullback, primarily driven by reports that the US had agreed to temporarily waive sanctions on Iranian oil during negotiations. The news from Iran's semi-official Tasnim news agency was seen by the market as a positive sign of easing short-term supply risks, triggering profit-taking by some long positions and a technical correction.
However, this decline was short-lived. As core geopolitical supply concerns regained momentum, oil prices quickly stabilized and rebounded significantly on Monday.
IEA warns of rapid inventory depletion.
International Energy Agency (IEA) Executive Director Fatih Birol stated during the G7 finance ministers' meeting in Paris that commercial crude oil inventories are rapidly declining due to conflict and disruptions to shipping in the Strait of Hormuz, with only a few weeks' worth of supply remaining. While the release of strategic petroleum reserves adds approximately 2.5 million barrels of supply to the market daily, these reserves are "not inexhaustible."
Birol emphasized that the energy market is facing "the biggest energy security threat in history."
Sanctions waiver news and negotiation deadlock
Iran's semi-official news agency Tasnim reported that the United States agreed to temporarily lift oil sanctions on Iran in the latest round of negotiations, but Tehran insists on the complete lifting of all sanctions as part of a comprehensive agreement. Pakistan, acting as a mediator, has forwarded Iran's revised proposal and warned both sides that "time is running out."
The latest tough statements from both sides have exacerbated uncertainty.
US President Trump warned Iran that "the clock is ticking" and urged it to act quickly or "there will be nothing left." He stated bluntly that the current ceasefire agreement is "life-sustaining" and called Iran's latest proposal "completely unacceptable."
Iran responded that the United States had not offered any substantial concessions, insisting on the complete lifting of sanctions, the end of the blockade, and compensation for war losses. It also warned that continued damage to oil infrastructure would have long-term impacts on global supply. These tough statements further amplified market concerns about a breakdown in negotiations and a prolonged conflict.
Other market factors amplify volatility.
While U.S. crude oil production has grown strongly, it is still insufficient to fully compensate for the potential supply gap of approximately 13 million barrels per day caused by the disruption of operations in the Strait of Hormuz. China's crude oil processing volume in April fell to its lowest level since August 2022, indicating demand-side pressure, but Asia remains a significant potential buyer of Iranian crude oil. The global economic outlook, inflationary pressures, and policy uncertainty are also contributing to the continued strength of oil prices at high levels.
Outlook and Risks
Given Trump's latest warnings and Iran's hardline stance, a breakthrough through Pakistan's mediation efforts is unlikely. If shipping through the Strait of Hormuz remains restricted, oil prices are likely to continue rising due to news-driven factors; conversely, if negotiations make substantial progress or more reserves are released, oil prices may experience a correction.
Currently, the fragile ceasefire and the tension over supply remain the dominant factors, with geopolitical risk premiums remaining high, and the oil market is expected to remain highly volatile in the short term. Investors need to continue to monitor the latest developments between the US and Iran, progress in the Pakistan mediation, IEA statements, and US crude oil inventory data.
- Risk Warning and Disclaimer
- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
