Oil Prices Remain Above US$100, Market Begins to Fear Supply Crisis
Jakarta, CNBC Indonesia - Global oil prices moved slightly on Thursday morning’s trading (7/5/2026), after collapsing more than 7% the previous day due to hopes of the Middle East war easing.
Based on Refinitiv data as of 09.20 WIB, Brent was recorded at US$101.36 per barrel, up slightly from the previous close of US$101.27. Meanwhile, West Texas Intermediate (WTI) stood at US$95.05 per barrel, nearly stagnant from US$95.08.
Although the trading screens appeared calmer this morning, pressure on the global energy market has not truly subsided. Investors are beginning to realise one important thing: the war may stop, but oil supplies may not immediately recover.
Distribution routes from the Middle East Gulf to refineries around the world will take weeks to return to normal. During that period, the world will still have to rely on oil reserves that continue to be depleted.
Citing Reuters via Refinitiv, global oil stocks have fallen rapidly since the conflict erupted at the end of February. Goldman Sachs estimates that global inventories will be equivalent to 98 days of consumption by the end of May, down from 105 days at the end of February. At the same time, the world is entering the summer season in the northern hemisphere, a period when petrol, jet fuel, and energy consumption typically surges.
TotalEnergies CEO Patrick Pouyanne said the world has drained around 500 million barrels of oil reserves during the conflict. That figure is even larger than the total US commercial oil reserves, which currently stand at about 460 million barrels. Equinor CEO Anders Opedal estimates that the oil market will need at least six months to return to normal even if the war ends this month.
The market had previously breathed a sigh of relief after news emerged that Iran is reviewing a US peace proposal. That hope triggered Brent’s fall from US$114.44 per barrel on 4 May to US$101.27 on 6 May. In two days, Brent lost nearly 11.5%, while WTI plunged around 10.7%.
However, peace negotiations are still far from final. US President Donald Trump said direct talks with Tehran are still too early. On the other hand, Iranian officials described the US proposal as more like a wish list than a concrete agreement. Axios reported that Iran’s response to several key points is expected within the next 48 hours.
From a fundamentals perspective, the market is still overshadowed by declining US energy stocks. The Energy Information Administration (EIA) reported that US crude oil reserves fell by 2.3 million barrels last week to 457.2 million barrels. US petrol stocks are even projected to fall to around 198 million barrels by the end of summer, the lowest level for that period in modern history.
Disruptions are also occurring in Asia. Asia’s crude oil imports in April were reported to have dropped 30% from the previous year, the lowest since 2015. In Singapore, onshore fuel oil stocks fell to the lowest level in nearly a year. Meanwhile, Europe is beginning to warn of a potential jet fuel crisis starting in June if supplies from the Middle East have not fully recovered.