oil prices today: US oil reserves dropping sharply? Global oil prices swing as war disrupts supply and demand
Are US oil reserves falling rapidly?
Global oil markets remain volatile as war tensions affect supply routes, stocks and demand. Prices rose earlier but then fell during trading. The changes reflect uncertainty in supply chains and global demand.
Oil prices fall after reaching four-year high
Brent crude futures reached $126.41 per barrel, the highest level since March 2022. Prices later fell $4.02 to $114.01. The July contract closed at $110.88. WTI crude oil closed at $105.07 after previously reaching $110.93. Both indicators remain on an upward path for the fourth month due to supply concerns related to the Iran conflict.
Market movements fluctuate without a single clear trigger, analysts said. Large sell orders and contract expirations contributed to price fluctuations. Hedge funds also sold positions to secure gains. The US dollar weakened against the yen following warnings from Japan about possible intervention. Movements in foreign exchange also pressured oil prices.
While the USA is planning new military attacks on Iran, Iran has warned that long-term attacks may be carried out if the attacks continue. Iran also regained control of the Strait of Hormuz. Approximately one fifth of the world’s oil passes through this route. Brent prices have doubled since the conflict began.
Strategic Petroleum Reserve and export
Strategic Petroleum Reserve decreased by 7.12 million barrels in one week. This was the biggest weekly decline since October 2022. This marked the fifth consecutive weekly decline. Total SPR reserves fell by 17 million barrels in five weeks. The level currently stands at 398 million barrels. This is the lowest level since April 2025.
US oil and fuel exports exceeded 14 million barrels per day for the first time. Overseas buyers are looking for alternatives to Middle Eastern sourcing. Commercial crude stocks decreased by 6.23 million barrels. Gasoline stocks decreased by 6.08 million barrels. Distillate stocks fell by 4.49 million barrels. Gasoline supply has reached its lowest seasonal level since 2014. Global demand for US oil has reached record levels.
Ship traffic decreased in the Strait of Hormuz
Shipping traffic in the Strait of Hormuz dropped sharply. Only seven ships passed in 24 hours. Before the war, 125 to 140 ships traveled daily. The UAE has announced plans to exit OPEC after nearly 60 years. Analysts say the closure of the strait outweighs long-term group changes. Higher oil prices may reduce demand over time and ease supply pressure.
Increasing fuel prices affects consumers
Gasoline prices in the US have reached their highest level since 2022. The national average increased from $2.98 per gallon to $4.30. Diesel rose from $3.76 to $5.50 a gallon.
Shipping costs have increased as companies added fuel surcharges. The U.S. Postal Service added an 8% provisional fee. Amazon added a 3.5% fuel surcharge for sellers. Higher shipping costs increase the prices of goods such as clothing, cosmetics and furniture.
Air travel and airline costs are rising
Jet fuel prices have risen sharply before and remain high. Airlines increased baggage fees and ticket prices. Some airlines have added fees to seat selection. Flight schedules have been reduced and some routes have been cut. Lufthansa plans to cancel around 20,000 flights in six months.
Consumer goods and groceries may increase
Procter & Gamble warned of $1 billion in lost profits due to fuel and material costs. Unilever plans price increases of 2% to 3%. Fuel accounts for 15% to 30% of food costs. Fertilizer shipments also pass through the Strait of Hormuz. Food prices may increase after a delay of 3-6 months. The UN World Food Program estimates that another 45 million people could face hunger if conflicts continue. Global food insecurity could reach 363 million people.
Natural gas markets are giving mixed signals
US natural gas futures rose to a three-week high of $2.767 per mmBtu. While production is falling, LNG exports remain near record levels. Gas storage increased by 79 billion cubic feet. This was close to forecast levels. Mild weather reduced heating demand. Waha Hub prices have remained negative for 59 days due to pipeline limitations in the Permian region. Prices averaged minus $2.16 per mmBtu in 2026. U.S. gas production fell to 110 billion cubic feet per day in April. Daily production fell further due to production cuts. LNG export flows increased to 18.8 bcf per day. Demand is expected to fall from 102.9 bcfd this week to 99.9 bcfd next week.
Global economic outlook
High oil prices pose the risk of higher inflation and fuel costs around the world. Oil and gas continue to play a key role in transportation, electricity, plastics and fertilizers. Market volatility continues without resolution of the conflict. Analysts say reopening the Strait of Hormuz is unlikely any time soon.
FAQ
Q1. Why are fuel and airline prices increasing now?
Fuel prices are rising due to supply disruptions, rising oil costs and shipping limits. Airlines are facing higher jet fuel costs, resulting in higher ticket prices, baggage fees and reduced flight schedules globally.
Q2. How does the decrease in US oil reserves affect global markets?
Lower reserves indicate tighter supply. Increasing exports increase demand pressure. This combination is driving up prices, increasing the risk of inflation and increasing the costs of transportation, goods and food supply chains around the world.
