Industry leaders warn that oil-flow normalization is unlikely before 2027, with expectations of only partial recovery of pre-conflict levels even under rapid resolution.

Rising aviation and airline route cuts as jet fuel costs surge are contributing to a downward revision of 2026 oil demand growth by about 1.3 million barrels per day.

Macro headwinds, such as weaker PMI data in China and the Eurozone, contrast with a relatively robust US manufacturing sector, underscoring uneven global demand dynamics.

Brent crude hovered near $100 a barrel in May 2026 after a roughly 16% decline, driven by optimism in diplomacy and notable demand destruction, signaling that underlying supply fragilities remain unresolved.

Asian demand weakness, led by a drop in Chinese seaborne imports, is a major drag on prices and demand, driven by strategic SPR use and high jet fuel costs.

Diplomatic stalemate over Iran’s uranium enrichment and sanctions limits potential supply relief, with only modest tanker traffic through the Strait of Hormuz and reduced idle capacity.

The Atlantic hurricane season poses a meaningful upside risk to prices due to reduced commercial reserves potentially amplifying disruptions to Gulf of Mexico infrastructure.

Global oil inventories and SPR releases have been drawn down, with ongoing declines into Q2 2026 and a reduced OPEC spare capacity around 2.5 mb/d expected in 2027.