Global energy markets remained in a state of high tension during the week of May 11–17, 2026, as a high-stakes summit in Beijing concluded without a breakthrough on the blockade of the Strait of Hormuz. International market price assessments for Brent crude climbed by more than 3 percent on Friday, May 15, to reach $109.26 per barrel as investors braced for a sustained disruption of Middle Eastern supplies.
The price surge reflects a critical depletion of global inventories, with the International Energy Agency reporting that land-based oil stocks plunged by a record 170 million barrels in April alone. While US retail gasoline prices averaged $4.53 per gallon — a 52 percent increase from pre-war levels — the international market price assessments for US diesel stood at $5.66 per gallon by the end of the week. The aviation sector faces even steeper hurdles, as jet fuel prices reached an average of $181 per barrel by early May, forcing carriers like Lufthansa and British Airways to preemptively cancel thousands of flights as refined-product reserves vanish.
Against this backdrop of logistics paralysis, Saudi Aramco reported a 26 percent increase in first-quarter net profits to $33.6 billion, driven by surging prices and the maximum utilization of its East–West pipeline. Amin Nasser, Aramco’s chief executive, noted that the pipeline is currently operating at its full capacity of 7 million barrels per day, yet he warned that the global market would likely not normalize until 2027 if trade and shipping remain curtailed. In Washington, the administration of Donald Trump is mulling a suspension of the 18.4-cent federal gasoline tax and a possible ban on refined product exports to shield domestic consumers ahead of the Memorial Day holiday, a move analysts believe could cross a 50 percent probability if pump prices reach $5.00.
Geopolitical developments offered little relief, as President Trump used his visit to Beijing on May 14–15 to reiterate that the month-old ceasefire with Iran was on “massive life support.” Following the president’s rejection of Tehran’s latest peace proposal as “garbage,” Iranian officials, including parliamentary speaker Mohammad Ghalibaf, signaled that their armed forces were “ready to deliver a well-deserved response to any aggression.” Meanwhile, Tehran has begun attempting to institutionalize a new administrative regime in the Strait of Hormuz by levying tolls of approximately $1 per barrel on tankers permitted to pass through its territorial waters, a cost that China has reportedly accepted to keep its own supply lines flowing.
The crisis is inflicting profound damage on major Asian importers and smaller developing economies. In India, Prime Minister Narendra Modi issued a “challenge of patriotism” on May 10, urging 1.4 billion citizens to conserve fuel and use online meetings as state-owned oil firms lose an estimated $175 million daily subsidizing domestic prices. Taiwan’s Formosa Petrochemical has been forced to shut down 42 percent of its normal production capacity due to a lack of Middle Eastern naphtha, while Cuba’s energy minister, Vicente de la O Levy, announced on May 14 that the island had completely exhausted its fuel oil and diesel reserves, leading to blackouts of up to 22 hours in Havana.
Market forecasts for the remainder of the year remain bleak, with bond yields spiking as investors factor in long-term inflationary pressure. The 10-year US Treasury yield jumped to 4.59 percent on Friday, reflecting a growing consensus that the financial world must prepare for a “higher-inflation, higher-interest-rates” reality. Experts caution that even an immediate reopening of the Strait would not provide instant relief, as the repair of critical infrastructure, such as Qatar’s Ras Laffan gas liquefaction units, may take up to five years to procure necessary replacement parts.