Oil prices climb amid stalled talks

Oil prices rose on May 22 as investors weighed conflicting signals from U.S.-Iran talks tied to shipping in the Strait of Hormuz. Brent crude settled at $103.54 a barrel, up 96 cents, while U.S. West Texas Intermediate finished at $96.60, up 25 cents, after both benchmarks had climbed more than 3% earlier in the session. Reuters reported that traders were reacting to doubts over whether Washington and Tehran could reach a peace agreement that would allow traffic through the waterway to return to normal. U.S. Secretary of State Marco Rubio said there had been “some good signs” in the talks, but added that “there’s more work to be done” and “we’re not there yet.” ### Why did oil move if talks had not formally collapsed? May 22 trading reflected uncertainty more than a single official breakdown. Reuters reported that a senior Iranian source said no deal had been reached with the United States, though gaps had narrowed, while Rubio described progress in guarded terms after a NATO ministers’ meeting in Sweden. Phil Flynn of Price Futures Group said the market was struggling to keep up with changing headlines, and John Kilduff of Again Capital said prices were highly sensitive to each new development. (aol.com) Social-media posts that described the talks as stalled appeared alongside those market moves, but the underlying theme matched the reporting carried by Reuters: traders were pricing in the risk that normalization in Hormuz would take longer than hoped. Reuters said the two sides remained divided over Tehran’s uranium stockpile and over controls on the strait. (aol.com) ### Why does the Strait of Hormuz matter so much to crude prices? The Strait of Hormuz is the market’s focal point because it is a major artery for Gulf oil exports. Reuters reported that around 20% of global energy supplies moved through the strait before the war, and that disruptions have removed 14 million barrels a day of oil from the market, including exports from Saudi Arabia, Iraq, the United Arab Emirates and Kuwait. (aol.com) That is why even incremental changes in diplomacy have moved crude futures. Tamas Varga of PVM Oil Associates told Reuters that global oil inventories had been depleting as flows through Hormuz slowed to a trickle. Satoru Yoshida of Rakuten Securities said uncertainty over the talks was supporting expectations that Middle East instability and supply disruptions would persist. ### What were U.S., Iranian and regional officials saying? (channelnewsasia.com) Marco Rubio said on May 22 that the United States was in constant communication with Pakistan, which he said was facilitating the talks with Iran. A diplomatic source in Islamabad told IRNA that Pakistan’s army chief had left for Iran, according to Reuters. Reuters also reported that a Qatari negotiating team arrived in Tehran on Friday in coordination with the United States to help secure a deal, according to a source with knowledge of the matter. (energynow.com) Bloomberg reported on May 16 that Iran had said transit through Hormuz would flow once the conflict with the United States and Israel was over, but that the sides were still far from resolving their differences. That earlier report helps explain why traders treated each May 22 headline as material for supply expectations. (aol.com) ### Why did prices rise even though crude was still down for the week? Brent was down 5.48% for the week and WTI was down 8.37%, Reuters reported, showing how quickly expectations had swung with each report about diplomacy. Friday’s gain came after both contracts had fallen about 2% on Thursday to their lowest closes in nearly two weeks, according to Reuters reporting carried by Channel NewsAsia. (bloomberg.com) BMI, a Fitch Solutions unit, raised its average 2026 Brent forecast to $90 from $81.50, Reuters reported, citing a supply deficit, damage to Gulf energy infrastructure and a six- to eight-week normalization window after the conflict ends. ADNOC’s chief executive separately said full flows through the strait would not return before the first or second quarter of 2027 even if the conflict ended immediately, according to Reuters. (aol.com) ### What comes next for the market? June 7 is the next scheduled marker for oil traders because seven leading OPEC+ producers are expected to discuss a modest increase in July output, according to four sources cited by Reuters. At the same time, the market will keep tracking statements from Rubio, Iranian officials, Pakistani intermediaries and the Qatari team in Tehran for signs that a shipping arrangement in Hormuz is moving closer or slipping further away. (aol.com) (energynow.com)