Oil Expected to Close Higher for the Fifth Consecutive Week
Yesterday (19th), the most active Brent contract closed with a 1.2% increase, reaching USD 108.6 bbl. Meanwhile, WTI futures took a different path, ending the day at USD 96.1 bbl (-0.2%).
Despite surpassing USD 119 bbl yesterday morning—driven by attacks on energy assets in the Middle East—oil futures saw a sharp reduction in gains after the U.S. Treasury Secretary confirmed that the White House is considering lifting sanctions on Iranian barrels stored on offshore platforms.
This morning (20th), the May 2026 Brent contract is trading down 0.7%, priced at USD 107 bbl as of 9:00 AM. The possibility of lifting sanctions on part of Iranian oil continues to pressure commodity prices. Nonetheless, crude oil prices are still expected to close higher for the fifth consecutive week, with no resolution in sight for the Middle Eastern conflict.
U.S. Considering Lifting Sanctions on Iranian Oil
Yesterday afternoon, U.S. Treasury Secretary Scott Bessent discussed the possibility of the White House lifting sanctions on Iranian barrels stored offshore. According to Bessent, this measure would release approximately 140 million barrels into the market.
Why This Matters: The anticipation around the lifting of sanctions has eased investor concerns regarding the global balance, leading to a rapid decline in the gains recorded during the previous session. However, it is important to note that no official decree has been issued by Washington so far.
- Another key point in Bessent's remarks involved the White House's consideration of announcing a new unilateral release of strategic reserves, in addition to the 172 million barrels already announced in coordination with IEA countries, which plan to deliver a total of 301 million barrels of oil to the market over the coming months.
- As a result, the market is awaiting updates on the U.S. government's decision, which might ease—but not resolve—the issues surrounding the unavailability of barrels from the Persian Gulf.
- It is worth noting that, currently, approximately 11.9 mbpd (million barrels per day) are stuck in the region, making it impossible to fully compensate for this volume through the release of strategic reserves—a short-term emergency measure meant to address regional supply disruptions.
Overview: In recent days, concerns about the Middle Eastern situation have continued to grow, with no clear timeline for resolving the conflict between the U.S., Israel, and Iran. As a result, ship traffic through the Strait of Hormuz remains restricted, with few vessels willing to make the passage and a significant portion of the oil produced in the Persian Gulf stranded in the region.
- Adding to this, attacks on energy assets in Iran, Kuwait, Qatar, and Saudi Arabia have heightened warnings about issues beyond logistics, with investors factoring in difficulties in increasing export flows of oil, gas, and derivatives—even in a scenario where ship passage through the strait resumes.
- Early this morning, new attacks were reported between Iran and Israel, with both nations avoiding energy infrastructure and primarily targeting military assets.
What to Expect: In the coming days, the market is likely to remain focused on new announcements from the White House, with the release of additional reserves and potential military developments expected to influence oil price volatility.
- It is critical to reiterate that the release coordinated by the IEA and the potential lifting of sanctions on Iranian offshore oil stocks cannot fully replace the volume of barrels trapped in the Persian Gulf. These measures serve as temporary solutions to address part of the lost supply.
- Consequently, as the blockade at the Strait of Hormuz continues, oil prices are expected to remain elevated. On the other hand, a potential resolution to the situation could reduce existing premiums, causing futures to move in the opposite direction. Of the two scenarios, the former remains the more likely outcome.
Daily Table - Previous Session Price Changes
Source: ICE, NYMEX. Prepared by: StoneX.
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