Oil & Gas

Oil prices increased as hopes for a peace agreement between the United States and Iran continued to weaken. President Donald Trump dismissed Iran’s response to a U.S. peace proposal, describing it as “garbage” and stating that the ceasefire between Washington and Tehran was in a very fragile condition. Iran’s reply reportedly contained demands that the U.S. had previously rejected.

Following the developments, Brent crude rose to $104.86 per barrel, while West Texas Intermediate traded at $98.93 per barrel. The situation has also intensified tensions between the two countries, especially after the United States imposed additional sanctions on entities accused of selling Iranian oil to Chinese refiners in violation of existing sanctions.

At the same time, concerns over global oil supply remain strong. A Reuters survey showed that OPEC production dropped by 830,000 barrels per day last month, averaging 20.04 million barrels daily. This decline came despite efforts by Saudi Arabia and the UAE to redirect oil exports away from the Strait of Hormuz. On the demand side, FGE NexantECA projected that global oil demand could fall by more than 4 million barrels per day during the second quarter of 2026 due to the economic effects of the conflict.

The ongoing Middle East crisis is also affecting the global economy by pushing fuel prices higher worldwide, including in the United States. The U.S. national average gasoline price reached $4.51 per gallon, leading to discussions about temporarily suspending the federal fuel tax to ease pressure on consumers.