Trump Calls Ceasefire with Iran "Critical", Global Oil Prices Break Through 104 US Dollars
Global oil prices strengthened nearly 3% at the close of trading on Monday (11/5/2026) US time, or Tuesday morning (12/5/2026) Western Indonesia Time.
The strengthening occurred after US President Donald Trump described the ceasefire with Iran as being in a “near failure” condition.
That statement triggered market concerns that the conflict in the Middle East region would continue, keeping the Strait of Hormuz partially closed without certainty on when the war would end.
Quoting Reuters, Brent crude oil prices rose 2.92 US dollars or 2.88% to 104.21 US dollars per barrel. Meanwhile, US West Texas Intermediate (WTI) crude oil rose 2.65 US dollars or 2.78% to 98.07 US dollars per barrel.
During intraday trading, Brent briefly touched a high of 105.99 US dollars per barrel, while WTI reached 100.37 US dollars per barrel.
However, last week, both oil benchmarks recorded a weekly decline of around 6%, as the market hoped the conflict, which has lasted 10 weeks, would soon end, allowing oil distribution routes in the Strait of Hormuz to return to normal.
A few days after Washington offered a proposal to reopen negotiations, Iran on Sunday conveyed a response focused on halting the war across all conflict fronts, including in Lebanon involving the Hezbollah group with Israel.
Iran also demanded compensation for war damages, asserted its sovereignty over the Strait of Hormuz, requested the US to halt the naval blockade, guarantee no further attacks, lift sanctions, and remove the ban on Iranian oil exports.
Rabobank energy strategist Florence Schmit said the market direction has now shifted back towards conflict escalation.
“The narrative has shifted again from de-escalation to escalation in just a few days, and the oil market is responding to that, although still relatively moderately,” she said.
Amid the tensions, Trump is scheduled to arrive in Beijing on Wednesday (13/5/2026) to meet Chinese President Xi Jinping and discuss the Iran situation along with several other issues.
“I don’t think anyone expects the US to escalate further this week while the Trump-China meeting is ongoing,” said Mizuho Energy Futures Director Bob Yawger.
On the supply side, a Reuters survey showed that OPEC oil production in April fell to its lowest level in more than two decades.
Oil production by 12 OPEC members was recorded to have fallen by 830,000 barrels per day from the previous month to 20.04 million barrels per day, due to the effective closure of the Strait of Hormuz forcing export reductions.
Kpler ship tracking data also showed that three tankers carrying crude oil successfully exited the Strait of Hormuz last week and on Sunday (10/5/2026) with trackers turned off. One of them is known to be transporting Iraqi oil to Vietnam.
Meanwhile, Japan announced that a tanker carrying Azerbaijani crude oil is scheduled to arrive as early as Tuesday (12/5/2026), becoming the first delivery since the US-Iran war began.
JPMorgan analysts estimate that oil prices will remain in the low 100 US dollars per barrel range through the rest of this year, averaging 97 US dollars per barrel in 2026, as supply normalisation is expected to proceed slowly even if the Strait of Hormuz is reopened.