Crude Oil Prices Rally on Doubts Over US-Iran Ceasefire Rich Asplund May 12, 2026 4 min read CL=F RB*0 CL*0 June WTI crude oil (CLM26) today is up +3.95 (+4.03%), and June RBOB gasoline (RBM26) is up +0.1110 (+3.08%). Crude oil and gasoline prices are moving sharply higher today after President Trump cast doubt over the ceasefire with Iran, which could lead to the escalation of hostilities that keep the Strait of Hormuz closed. Crude prices continue to climb after President Trump and Iran rejected each other's latest peace proposals to end the 10-week conflict.
President Trump called Iran's response to his peace proposal a "piece of garbage" and said that the current ceasefire was on "life support." More News from Barchart Nat-Gas Prices Rally on Warmer US Weather Forecasts Crude Oil Prices Jump as Strait of Hormuz Remains Shut Strait of Hormuz Closure Pushes Crude Prices Higher Markets move fast. Keep up by reading our FREE midday Barchart Brief newsletter for exclusive charts, analysis, and headlines. Crude prices are also supported after President Trump said on Monday that the US may restart the operation as soon as this week to guide commercial ships through the Strait of Hormuz with naval and air support.
Saudi Arabia and Kuwait have lifted restrictions on the US military's use of their bases and airspace when Iran launched missiles and drones at the UAE in response to the US effort to open the strait. Saudi Arabia and Kuwait had blocked the US military's use of their bases and airspace after senior US officials downplayed Iranian attacks on the Persian Gulf in reaction to opening the strait. Energy prices remain underpinned as the US-Iran war keeps the Strait of Hormuz closed.
The ongoing conflict is exacerbating global oil and fuel shortages, as about a fifth of the world's oil and liquefied natural gas transits through the strait. Goldman Sachs estimates that crude output in the Persian Gulf has been curtailed by about 14.5 million bpd, and that the current disruption has drawn down nearly 500 million bbl from global crude stockpiles, which could hit a billion bbl by June. Persian Gulf oil producers have been forced to cut production by roughly 6% due to the closure of the Strait of Hormuz as local storage facilities reach capacity.
Last Thursday, the International Energy Agency (IEA) said that about 14 million bpd of global oil supply has been shuttered by the Iran war and the closure of the Strait of Hormuz. The IEA also said that more than 80 energy facilities have been damaged during the conflict, and a recovery could take as long as two years. In a bearish factor for crude, OPEC+ on May 3 said it will boost its crude output by 188,000 bpd in June after raising production by 206,000 bpd in May, although any production hike now seems unlikely given that Middle East producers are being forced to cut production due to the Middle East war.
OPEC+ is trying to restore all of the 2.2 million bpd production cut it made in early 2024, but still has another 827,000 bpd left to restore. OPEC's April crude production fell by -420,000 bpd to a 35-year low of 20.55 million bpd. Story Continues Vortexa reported on Monday that crude oil stored on tankers that have been stationary for at least 7 days fell -33% w/w to 103.90 million bbl in the week ended May 8.
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