US-Iran Peace Deal at Risk of Failure, Oil Prices Break Through US$105
Jakarta - Global oil prices climbed again during Tuesday morning trading (12/5/2026). This increase extends the sharp rally from last week, when markets began recalculating global supply risks due to the heating up of the Iran conflict and uncertainty in the Strait of Hormuz.
According to Refinitiv at 09:30 WIB, the Brent crude oil July contract (LCOc1) stood at US$105.3 per barrel. This position rose 1.05% from the previous close at US$104.21 per barrel. Meanwhile, West Texas Intermediate (WTI) strengthened to US$99.24 per barrel from US$98.07 per barrel the previous day.
In the last eight trading days, Brent has soared nearly 19% from the US$88 range before the Middle East conflict peaked at the end of April. WTI even briefly touched the psychological US$100 per barrel level, last seen during a sharp global geopolitical escalation several years ago.
The energy market remains focused on the Iran situation. Citing Reuters via Refinitiv, negotiations between the United States and Iran remain fragile. US President Donald Trump even described the ceasefire with Iran as being “on life support”. Tehran has put forward a series of demands, from halting the US naval blockade, war compensation, to recognition of Iran’s sovereignty over the Strait of Hormuz.
The Hormuz issue has become the most sensitive point. This sea route handles about one-fifth of the world’s oil and LNG flows. Even a minor disruption immediately alters global market calculations. KCM Trade analyst Tim Waterer said that as long as physical flows in Hormuz remain disrupted and negotiations have not reached a clear point, oil prices are likely to stay above US$100 per barrel. He forecasts that Brent could head back towards US$115 if blockade threats intensify.
Supply pressures are intensifying after a Reuters survey showed OPEC oil production in April falling to the lowest level in more than two decades. Several producers have reduced exports due to disrupted shipping routes. Saudi Aramco CEO Amin Nasser even warned that market oil stability recovery could be delayed until 2027 if Hormuz disruptions continue. He estimates potential supply losses could reach 100 million barrels per week.
Amid the price surge, the US government is trying to calm the market. Washington announced the loan of 53.3 million barrels of oil from the US strategic petroleum reserve (SPR). Ship tracking data shows that some SPR oil has already been shipped to Turkey. This move is seen as an effort to dampen market panic while maintaining short-term supplies.
However, geopolitical pressures have not eased. The US on Monday local time imposed sanctions again on three individuals and nine companies accused of helping ship Iranian oil to China. The sanctioned companies are from Hong Kong, the United Arab Emirates, and Oman. The US government assesses that this network helps Iran’s Revolutionary Guard sell oil through shell companies and a shadow tanker fleet.
The market now awaits diplomatic developments between Washington, Beijing, and Tehran in the coming days. The Trump-Xi Jinping meeting is expected to be one of the determinants of the global energy market direction. China remains the main buyer of Iranian oil, so any change in Beijing’s stance could directly affect the world supply balance.