NEW YORK (Realist English). On May 7, 2026, the global oil market remained highly volatile. Prices moved lower amid reports of progress in US-Iran negotiations, although underlying fundamentals — including the blockade of the Strait of Hormuz and declining inventories — continued to support crude prices. Analysts warn that any disruption in the diplomatic process could quickly return oil to the $130–150 per barrel range.
Price dynamics
Oil prices partially recovered losses from the previous trading session on May 7, although the broader trend remains downward. Over the past week, crude has fallen by roughly 11% on expectations that shipping through the Strait of Hormuz could soon resume.
Trading results for May 7
| Instrument | Price | Change |
| Brent (July) | $102.15/bbl | +0.9% |
| WTI (June) | $96.20/bbl | +1.2% |
| Urals (spot) | $84.41/bbl | -10.4% vs. May 5 |
On May 6, Brent closed at $107.98 (-1.7%), while WTI fell to $96.36 (-11.8%) amid reports surrounding the negotiations.
Statistics and fundamental factors
According to the US Energy Information Administration (EIA) for the week ending May 1, 2026:
- Commercial crude inventories declined by 2.3 million barrels to 457.2 million barrels, compared with forecasts for a 4.5–5 million barrel drop.
- Inventories remain 1% above the five-year average.
- US oil production held steady at 13.585 million bpd.
- Average four-week petroleum product demand reached 20.3 million bpd, up 2.6% year-on-year.
The key supply-side factor remains the blockade of the Strait of Hormuz, which continues to keep 13–14.5 million bpd of Middle Eastern crude off global markets — roughly 15% of global oil demand. Iran has lost between 1.6 and 3.3 million bpd of export capacity.
Impact of US-Iran negotiations
On May 7, US President Donald Trump stated that a deal with Iran was “very possible.” According to Axios, the parties are close to signing a one-page memorandum of understanding. Iranian officials, however, described the leaks as an “American wish list” and denied that an agreement was imminent.
The market responded with lower prices, although analysts caution that the optimism may be premature. The Royal United Services Institute (RUSI) noted that the US blockade remains effective, while Iran is partially offsetting its losses by charging transit fees to third-party vessels passing through the region.
Expert forecasts
Pessimistic scenario (Business Standard):
If the conflict continues for another eight weeks without the reopening of the Strait of Hormuz, Brent could rise to $130–145 per barrel, with hedging risks potentially pushing prices toward $150.
Baseline forecast (EIA, World Bank):
The EIA raised its average 2026 Brent forecast from $69 to $96 per barrel and WTI from $65 to $87. Prices are expected to peak around $115 per barrel in the second quarter of 2026 before declining toward $76 in 2027. The World Bank forecasts Brent at $86 if the crisis worsens further.
JPMorgan:
If the strait remains closed until mid-May, oil prices could exceed $150 per barrel.
Goldman Sachs:
Brent is likely to remain above $100 as long as global demand continues to outpace supply.
StoneX:
The market has corrected by more than 8% on optimism surrounding the negotiations, but the primary structural driver remains ongoing disruption in the Strait of Hormuz.
Natural gas market
United States (Henry Hub):
Natural gas futures are trading in the $2.4–3.0 per MMBtu range, with average prices near $2.7–2.8. Prices are expected to ease toward $3.5 in 2026 before rising to $4.6 in 2027.
Europe (TTF):
Prices remain stable at €47–48 per MWh, equivalent to approximately $545–603 per 1,000 cubic meters.
OPEC+ decision and Russia’s position
On May 3, seven OPEC+ members approved an increase in production quotas of 188,000 bpd for June. However, because of the blockade of the Strait of Hormuz, the additional volumes cannot physically reach global markets, making the decision largely symbolic.
Russia is effectively benefiting from the supply deficit. The average price of Russia’s Urals crude in April 2026 rose to $94.87 per barrel — well above the country’s fiscal “cut-off price” of $59 per barrel, above which excess oil revenues begin flowing into the budget. At current prices, Russia’s additional monthly oil and gas revenues could exceed $5 billion.
The oil market has entered a highly unusual phase in which geopolitical shocks have overwhelmed the underlying global supply surplus, driving prices up nearly 70% within a single month. The current correction is based almost entirely on diplomatic optimism. Any collapse in negotiations — especially amid intensified Israeli military pressure on Lebanon and Iran — could rapidly push crude prices back above $130 per barrel. Inventories continue to decline, alternative export routes remain insufficient, and the amount of available “oil on water” is finite.
