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| Oil prices in last week of May, 2026 |
Oil prices continue to fluctuate in direct response to President Trump's statements on Truth Social, creating a pattern of volatility since the current conflict began on February 28, 2026.
When the President suggests potential breakthroughs in negotiations with Iran, prices tend to drop, even if Tehran subsequently dismisses the claims. Conversely, threats of escalation consistently drive prices higher. Critics argue these communications are strategically timed to influence both oil markets and broader stock market rallies.
A recent example occurred last Friday, when the President claimed to be entering the Situation Room to finalize an agreement with Iran, hinting at the potential lifting of the blockade. Despite high expectations, no official outcome was announced after the meeting. Nevertheless, there are signs that the long-standing hostility between the two nations may be softening. Reports suggest Iran may be making concessions, though the transfer of enriched uranium remains a significant obstacle to a final deal.
The global energy supply remains fragile. While only about 20 percent of global oil transits through the Strait of Hormuz, falling global reserves and rapidly declining U.S. crude stocks indicate that governments are actively tapping into strategic reserves to stabilize prices. As of 17:00 last Friday, West Texas Intermediate (WTI) traded at 87.35 dollars per barrel, while Brent crude stood at 91.12 dollars per barrel. Meanwhile, liquefied natural gas (LNG) prices remain elevated; this suggests that major producers like Qatar are struggling to navigate the current blockade in the Strait of Hormuz.
A recent example occurred last Friday, when the President claimed to be entering the Situation Room to finalize an agreement with Iran, hinting at the potential lifting of the blockade. Despite high expectations, no official outcome was announced after the meeting. Nevertheless, there are signs that the long-standing hostility between the two nations may be softening. Reports suggest Iran may be making concessions, though the transfer of enriched uranium remains a significant obstacle to a final deal.
The global energy supply remains fragile. While only about 20 percent of global oil transits through the Strait of Hormuz, falling global reserves and rapidly declining U.S. crude stocks indicate that governments are actively tapping into strategic reserves to stabilize prices. As of 17:00 last Friday, West Texas Intermediate (WTI) traded at 87.35 dollars per barrel, while Brent crude stood at 91.12 dollars per barrel. Meanwhile, liquefied natural gas (LNG) prices remain elevated; this suggests that major producers like Qatar are struggling to navigate the current blockade in the Strait of Hormuz.
Meanwhile, oil stocks in major industrial nations are falling rapidly, signaling that governments are tapping into strategic reserves to mitigate rising prices. In the United States, for instance, crude oil inventories are currently experiencing a sharp decline.
The situation inside Iran is equally difficult, according to Iranians sources. The country is effectively unable to export its oil due to the U.S.-led blockade, and it is simultaneously failing to meet domestic demand due to severe logistical constraints, resulting in a significant shortfall of millions of barrels for local consumption. With global markets remaining sensitive, the trajectory of oil prices for the coming week will likely depend on the President's next series of updates expected this Sunday night.
The volatility in oil prices is placing significant strain on Asian currencies, particularly as most nations in the region are net energy importers - perhaps more than 82% of their need.
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| Downward Trend of Composite Asian Currency Index |
Countries with high energy dependency, such as South Korea, Thailand, the Philippines, Taiwan, India and even Sri Lanka are especially vulnerable; their currencies frequently weaken as rising oil costs worsen trade balances and fuel inflationary pressures. In the worst case scenario, the currency depreciation can even trigger unpredictable political chaos as well, unless oil prices come down significantly.
While the region’s currencies have shown some resilience at times, any sustained increase in global oil prices tends to trigger broader depreciation, as investors often pivot toward the U.S. dollar as a safer asset during geopolitical instability.
Central banks across Asia are currently facing a difficult dilemma, balancing the need to support weakening currencies against the risk of stifling economic growth in an already strained environment.
In this context, President Trump's tweets that fluctuate between optimism and complete breakdown of trust hardly help calm down anxious nations.
