Full Breakdown
Oil Prices Climb as US-Iran Talks Stall and Supply Risks Persist
5/12/2026, 5:14:50 AM
Oil Prices Surge Amid Fragile US-Iran Negotiations
On Tuesday, early Asian trade saw Brent crude rise 30 cents to $104.51 per barrel and U.S. West Texas Intermediate increase 31 cents to $98.38, each up 0.29-0.32 % and both roughly 2.8 % higher than the previous day. The gains followed remarks that negotiations to end the war between the United States and Iran remain fragile, keeping concerns about oil flow through the Strait of Hormuz alive.
Background & Context
The Strait of Hormuz carries about one-fifth of global oil and liquefied natural gas shipments. Tehran has demanded a full cessation of hostilities, removal of a U.S. naval blockade, resumption of Iranian oil sales, and compensation for war damage. Disruptions to the strait have prompted producers to curtail exports, and OPEC’s April output fell to its lowest level in more than two decades.
Key Figures & Groups
- President Donald Trump – U.S. President, described the ceasefire as “on life support.”
- Tim Waterer – Chief market analyst, KCM Trade.
- Amin Nasser – CEO, Saudi Aramco.
- OPEC – Organization of the Petroleum-Exporting Countries.
- U.S. Strategic Petroleum Reserve (SPR) – source of a 53.3-million-barrel loan.
- United Arab Emirates (UAE) – alleged executor of strikes on Iranian facilities.
- Hong Kong, United Arab Emirates, Oman – locations of firms sanctioned for facilitating Iranian oil shipments to China.
Data & Statistics
- Brent: $104.51/bbl (+0.29 %); WTI: $98.38/bbl (+0.32 %).
- OPEC output in April: lowest in over 20 years.
- Estimated loss from strait disruptions: ? 100 million barrels per week.
- U.S. SPR loan: 53.3 million barrels, with one shipment en route to Turkey.
- Sanctions: three individuals and nine companies targeted.
- UAE strike: early-April attack on Lavan Island refinery (unconfirmed by UAE).
Why It Matters / Impact
Analysts warn that continued negotiation deadlock could keep benchmark prices above $100 per barrel, while any breakthrough might trigger an $8-12 % correction. Persistent supply constraints risk extending market volatility into 2027, according to Saudi Aramco. The SPR loan aims to temper price spikes, but its effectiveness depends on the resolution of geopolitical tensions.
Official Statements & Responses
- President Trump: “The ceasefire with Iran is on life support.”
- Tim Waterer: “As long as the US-Iran negotiations remain inconclusive and physical flows through the Strait of Hormuz stay restricted, we should see prices holding above $100.”
- Waterer added: “A genuine breakthrough toward a peace deal could trigger a sharp $8–12 correction, while any escalation or renewed blockade threats would quickly push Brent back toward $115+.”
- The U.S. administration announced the SPR loan as a market-stabilizing measure.
Conflicting Reports & Gaps
The Wall Street Journal reported UAE strikes on Iranian oil infrastructure, yet the UAE has not publicly confirmed the attacks. Details of the sanctioned entities’ operations remain limited, leaving uncertainty about the broader impact on Iranian oil exports to China.
What’s Next
President Trump is scheduled to meet Chinese President Xi Jinping in the coming days, a diplomatic context that may influence sanctions enforcement and oil flows. Further SPR deliveries to Turkey are underway, and market participants will watch for any substantive progress in US-Iran talks that could trigger the anticipated price correction.
