Brent crude oil held near $95 a barrel this week, rising for a second consecutive week after a 13% monthly decline in May. The International Monetary Fund warns global prices are running approximately 3% above its April 2026 growth baseline, directly linking the gap to the Iran conflict. This comes as the fund estimates Iran-related disruptions have cut oil production by 14 million barrels per day.
Reserve Decline Looms
Global oil reserves are projected to hit a five-year low of 7.5 billion barrels by July 2026 according to the IMF. The Strait of Hormuz remains a critical vulnerability, handling 20% of the world's oil flows through the conflict-affected region. That bottleneck makes any further disruptions potentially explosive for prices.
Services Index Flashpoint
The ISM Services Prices index surged to 71.3 in May 2026, its highest reading since August 2022. Diesel, gasoline and oil costs drove the spike, with the index jumping 8.3 points since February. That acceleration suggests consumer price inflation could exceed 5% if sustained.
Split Market Signals
Options traders are aggressively bullish, with BNO put-call ratios at just 0.06 for volume and 0.11 for open interest. Speculative funds tell a different story. They held a net short position of 90,924 contracts against 58,110 long positions as of May 26. The divergence highlights deep uncertainty among different investor groups.
Venezuela's Temporary Relief
Venezuela's crude oil exports jumped 61% year over year to 1.25 million barrels per day in May 2026. The increase followed eased U.S. sanctions on Venezuelan shipments. But analysts note this won't offset the broader supply crunch from Iran-related cuts.
The next reserve data release in July 2026 will confirm whether the 7.5 billion barrel low materializes, a potential trigger for another price surge.
