LONDON (Realist English). On May 22, global energy markets closed with solid gains, recovering part of the week’s losses. Oil prices surged after investors began to doubt the possibility of a rapid diplomatic breakthrough between the United States and Iran, while European gas prices stabilised near €47/MWh, reacting sharply to critically lagging underground storage refill rates.
Oil market: a week of contrasts ends with gains
July Brent crude futures rose by 0.94% to $103.54 per barrel, while the US benchmark WTI gained 0.26%, reaching $96.60 per barrel.
At the same time, both benchmarks lost 5–8% over the course of the week amid brief hopes for a rapid US-Iran agreement. By Friday, however, the market had once again priced in a geopolitical premium, recognising that the key disagreements — the future of Iran’s nuclear programme and control over the Strait of Hormuz — remain far from resolution.
The main driver continues to be the closure of the Strait of Hormuz, which analysts estimate is removing around 14 million barrels per day from the market — the largest supply shock in decades.
US oil inventories fell by 17.8 million barrels during the week, while the International Energy Agency (IEA) warned that the market could enter a “red zone” of acute shortages by summer.
Diplomacy on hold, military rhetoric returns
By May 22, it had become clear that negotiations between Tehran and Washington had encountered serious difficulties.
US President Donald Trump again threatened to resume military action “within days” if Iran failed to make concessions. Iran’s Supreme Leader, Mojtaba Khamenei, according to unconfirmed reports, vetoed the export of enriched uranium abroad — one of Washington’s key demands.
“This is not the first time a deal has appeared close only for negotiations to collapse. A significant part of the market will remain sceptical of any positive signals,” ING analysts warned.
Gas market: Europe remains on edge
Europe’s TTF gas benchmark rose slightly on Friday, closing at €46.75 per MWh.
Despite relatively calm trading, the fundamental outlook remains concerning:
– European underground gas storage facilities are only 35.6% full, compared with 42.8% on the same date last year;
– The gap relative to the five-year average exceeds 25 percentage points;
– Any new escalation in the Middle East or a colder-than-expected winter could trigger a sharp increase in prices.
Analyst forecasts and assessments
Western analysts generally agree that a return to cheap oil in the foreseeable future appears unlikely.
- Barclays maintained its Brent forecast at $100 per barrel, while noting that risks remain skewed to the upside. Even under an immediate settlement scenario, commercial inventories would remain around 20 million barrels below critical levels.
- BMI (Fitch Solutions) raised its forecast to $90 per barrel (from $81.50) due to expectations of a prolonged recovery of infrastructure following the blockade.
- Citigroup sees the potential for a short-term rise to $120 per barrel, and up to $150 per barrel under a bullish scenario.
- Wood Mackenzie does not rule out a worst-case scenario in which Brent rises to $200 per barrel by the end of 2026 if the Strait of Hormuz remains closed.
- The head of the IEA warned that by July–August, supply shortages could become “unmanageable” without a coordinated release of strategic reserves.
- The Abu Dhabi National Oil Company (ADNOC) forecasts that normalisation of tanker traffic through Hormuz may not begin before the first or second quarter of 2027.
The energy market remains in a waiting mode, anticipating real political decisions. Any signals of progress in negotiations push prices lower, while renewed military rhetoric immediately reverses that trend.
As diplomats attempt to rescue the negotiation process, the physical supply deficit is becoming an increasingly serious source of pressure on global markets. Analysts agree on one point: the era of cheap hydrocarbons has ended, and the global energy market is likely to remain a “hostage” of the Strait of Hormuz at least until the end of 2026.
