Global fuel inventories are tightening as tensions in the Middle East persist.
Oil prices surged sharply on Monday (May 18) as traders weighed ongoing supply disruptions linked to tensions in the Middle East and tightening global inventories, pushing benchmark crude contracts further above the $100-per-barrel level.
US benchmark West Texas Intermediate (WTI) rose $1.22 to $106.64 per barrel in early trading as of 9:24 am Tokyo time, while Brent crude, the international benchmark, gained $1.03 to $110.29 per barrel.
Murban crude surged 3.15% to $108.00, while the OPEC basket advanced nearly 7% to $115.09.
Natural gas futures also climbed, rising 2.06% to $3.021 per million British thermal units.
Volatility
Energy markets remained highly volatile amid continued uncertainty over shipping flows through the Strait of Hormuz, a critical artery for global oil exports.
Moody’s Ratings, in its latest energy industry report, said disruptions to one of the world’s most important energy shipping routes are increasingly looking less like a short-term shock and more like a structural risk—one that could reshape global trade, energy markets, and economic planning well beyond 2026.
Analysts said concerns over prolonged disruption have kept a geopolitical risk premium embedded in crude prices.
Supply losses
The International Energy Agency (IEA) said last week that global oil inventories are falling at a record pace as supply losses mount across Gulf producers.
The agency estimated that more than 14 million barrels per day remain offline due to restricted tanker traffic and infrastructure disruptions linked to the regional conflict.
OPEC last week lowered its forecast for global oil demand growth in 2026, citing elevated prices and weaker economic activity stemming from the conflict.
Still, traders largely focused on near-term supply risks rather than softer demand projections.
Among regional crude benchmarks, Western Canadian Select rose 4.78% to $93.07 per barrel, while Louisiana Light advanced 1.42% to $104.52. Russia’s Urals crude slipped 0.81% to $96.72.
Retail gasoline prices have also risen in recent weeks, adding pressure to global inflation readings and complicating the outlook for central banks already struggling with persistent price growth.
