Crude prices climbed to $90.85 on Thursday as the U.S. launched fresh strikes on Iran and wholesale inflation data confirmed that war-driven energy costs are hammering American businesses. The U.S. military carried out strikes against multiple targets in Iran for a second day after President Trump accused Tehran of delaying talks on an interim peace deal. For anyone holding energy assets or worried about their gas bill, the question now is whether oil has room to spike further — or whether the market is quietly signaling a ceiling.
The Strait Is Still Closed, But Oil Isn't Acting Like It. Shipping traffic through the Strait of Hormuz has been largely blocked by Iran since February 28, 2026, when the United States and Israel launched an air war against Iran. The strait normally carries roughly 20% of the world's seaborne oil. Yet WTI at ~$91 is well below the $117 April average and the $107 May average for Brent. So far, oil facilities have largely been spared, which has helped prevent the kind of supply shock many traders had feared.
The UAE and Iran held rare direct talks, raising hopes for diplomatic de-escalation. Prices have actually fallen 14% over the past month, suggesting traders are cautiously betting on a reopening.
America's Oil Cushion Is Draining Fast. U.S. crude stockpiles, including strategic reserves, fell by 15 million barrels last week and have declined by more than 70 million barrels over the past five weeks, marking the largest drawdown since the 1980s. That buffer — the barrels the government and industry keep on hand for emergencies — is vanishing at a pace not seen in four decades. If diplomacy stalls, there is less room to absorb another supply shock.
Wholesale Inflation Is Screaming "Energy Crisis." The producer price index increased 1.1% in May, putting the 12-month wholesale inflation rate at 6.5%, the highest since November 2022.
80% of the rise in goods prices came from a 10.7% jump in energy. Gasoline prices rose 23.4% at the wholesale level. This matters because producer prices eventually flow into what consumers pay. Resurgent inflation is also likely to keep the Federal Reserve on the sidelines, with some Wall Street economists speculating that policymakers are more likely to hike interest rates than to cut them.
The Clock Is Ticking on a Deal. Saudi Aramco CEO Amin Nasser warned that the oil market will take until 2027 to normalize if the Strait stays blocked beyond mid-June.
The Dallas Fed estimates the closure could raise WTI to $98 per barrel and lower global GDP growth by an annualized 2.9 percentage points in Q2 2026. Every week without a deal erodes the world's ability to snap back. At $91, oil looks deceptively calm — but the fundamentals underneath are anything but.