18th May 2026
The latest jump towards $111 a barrel is mainly being driven by renewed fears that the Middle East oil crisis is not easing after all. Traders had briefly hoped the situation around Iran and the Strait of Hormuz might calm down, but those hopes have faded sharply over the last few days.
The biggest issue is still the Strait of Hormuz — the narrow shipping route between Iran and the Gulf states through which roughly a fifth of the world’s oil normally passes. Markets are increasingly worried that disruption there could drag on for weeks or even months. Tanker movements remain heavily disrupted and some ships are reportedly travelling with tracking systems turned off because of security fears.
Several things pushed prices higher again today:
Peace talks between the US and Iran appear stalled.
President Trump made fresh comments suggesting the ceasefire is “on life support”.
Iran has repeated demands involving sanctions relief and compensation.
There are fears of more attacks on oil infrastructure and shipping.
Traders believe Gulf oil exports may remain restricted for longer than expected.
Another reason prices are climbing is that global stockpiles are being steadily drained. Governments and companies have been releasing emergency reserves and using stored oil to keep supplies flowing, but analysts say inventories are falling fast. Some estimates suggest the world has already lost hundreds of millions of barrels of available supply since the crisis escalated.
Normally, rising prices would encourage producers like OPEC and Gulf states to pump more oil. However, markets currently believe extra production cannot fully solve the problem because the real bottleneck is transport and security in the Gulf region rather than simply production capacity.
Financial markets are also adding a “risk premium” onto oil. Traders are effectively pricing in the possibility that the conflict could worsen suddenly. Even rumours, military statements or diplomatic setbacks are now moving prices sharply day to day, creating the “yo-yo” swings you mentioned earlier.
For the UK, this matters because higher crude prices usually feed through into:
petrol and diesel prices,
heating costs,
airline fares,
food transport costs,
and eventually broader inflation.
If Brent crude stays around $110-$120 for long, UK fuel prices could rise noticeably again during late May and June. Some analysts are warning that if the Strait of Hormuz disruption worsens significantly, prices could spike far beyond current levels.