Let’s start with what actually happened this week

On Tuesday last week, a US Navy vessel struck an empty oil tanker heading toward Iran. Tehran’s response was swift — Iran launched attacks on US naval bases in Bahrain and Kuwait, as well as hitting commercial vessels in the Gulf. Then, just a day later, Iran walked out of peace negotiations with Washington entirely, suspending the talks that had briefly given oil markets hope of a ceasefire deal.

Brent crude shot up to $98 on Wednesday as a result, before easing slightly to around $96 on Thursday after Israel and Lebanon agreed to implement a separate ceasefire. But even that relief was small — Brent is still up almost 5% on the week. Shipping through the Strait of Hormuz has remained subdued since the conflict began. The strait has not fully reopened. And nobody in the market is confident that it will any time soon.

The other number that quietly rattled oil traders this week: US crude oil stocks fell by 7.97 million barrels in the week ending May 29 — nearly double the 4 million barrel drop that analysts had predicted. That is the second consecutive week of sharp drawdowns. When stockpiles fall that fast, it means the world is consuming oil faster than it is producing it. In a world where Hormuz is already disrupted, that kind of inventory data is genuinely alarming.

We are in a stalemate, a frozen conflict. In the meantime, the straits are closed — so we are in a no war, no oil, no straits condition.

— Amos Hochstein, former Senior Energy Advisor to President Biden, CNBC May 2026

What the Strait of Hormuz closure actually means — in plain terms

Here is something worth understanding properly because news coverage often breezes past it. The Strait of Hormuz is a narrow waterway — about 21 miles wide at its narrowest point — between Oman and Iran. Every single day in peacetime, roughly 21 million barrels of oil pass through it. That is about one-fifth of all the oil the world uses in a day.

Saudi Arabia, the UAE, Kuwait, Iraq and Iran itself all ship their oil through that strait. There is no easy alternative. Saudi Arabia has one pipeline — the East-West pipeline — that can carry about 5 million barrels a day around the strait. That covers barely a quarter of normal Hormuz traffic. So when the strait is disrupted, as it has been since the conflict began in early 2026, the global oil market is essentially trying to function with a massive hole in the supply side.

Saudi Aramco’s CEO Amin Nasser said it plainly on Monday: “If the Strait of Hormuz opens today, it will still take months for the market to rebalance. And if its opening is delayed by a few more weeks, then normalisation will last into 2027.” That is the world’s largest oil company saying that even the best-case scenario — peace tomorrow — means expensive oil through the end of this year. The worst-case scenario is considerably worse.

Why the Strait Matters More Than Any Other Chokepoint

Of the world’s nine major oil chokepoints — Hormuz, Suez Canal, Malacca Strait, Turkish Straits and others — Hormuz carries by far the most traffic. 21 million barrels a day versus the Suez Canal’s roughly 5.5 million. Closing Hormuz is not like closing a road and taking a detour. It is like closing the only bridge over a river while the alternative ferry takes three times as long and carries a quarter of the load. The infrastructure damage from the 2026 conflict — to refineries, pipelines and storage facilities across the Gulf — means that even a partial reopening will not restore supply quickly. Bob Parker of ICMA put it this way: “Even if the Strait of Hormuz is opened, opening will only be partial.”

Will oil actually hit $100 by Friday?

Here is the honest answer: it could, but it is not the most likely outcome. Let’s go through what would need to happen.

For Brent to cross $100 by Friday’s close, you need a trigger. Right now the market is sitting in a tense holding pattern around $96 — neither a confirmed peace deal nor a full Hormuz closure. The oil market is essentially pricing in uncertainty, which historically sits oil somewhere between the two extremes.

The scenarios that get you to $100 by Friday are specific. If Iran formally announces the Strait is closed to all commercial traffic — not just disrupted, but officially shut — expect an immediate $6–10 spike. We have seen exactly this before. When Trump called Iran’s ceasefire offer “garbage” on May 12 and the talks collapsed that day, Brent jumped 3.4% to $107.77 in a single session. A new escalation of that magnitude this week would take Brent comfortably above $100.

The second path to $100 is the US Non-Farm Payrolls report on Friday, June 6. This sounds strange — what does the US jobs report have to do with oil? Quite a lot, actually. A strong NFP number above 200,000 would reduce Fed rate cut expectations, push the dollar higher, and simultaneously signal strong US economic growth — meaning higher oil demand. It would not alone push Brent to $100, but combined with any negative Hormuz headline, the two together easily get there.

What Gets Brent to $100 by Friday — and What Doesn’t
Scenario Brent by Friday Probability India petrol impact
Iran officially closes Hormuz + new US strike $103–108 20% Next hike cycle begins
Talks remain dead, no new incident $95–99 45% OMCs pause, no cut
Surprise ceasefire deal by Thursday $84–89 15% Petrol cut possible in July
NFP strong + no Hormuz news $97–101 20% OMC pressure stays

The inventory problem nobody is talking about enough

The 7.97 million barrel drawdown in US crude stocks last week deserves more attention than it is getting. That was the second consecutive week of significant drawdowns. It means the global system is burning through its oil reserves at a pace that is clearly unsustainable if supply does not recover.

Think of it like a water tank. The tank was full at the start of 2026. Every week that Hormuz is disrupted, the world pulls more water out of the tank to compensate for reduced pipeline flow. The tank is not empty yet, but it is getting lower. Strategic petroleum reserves around the world — including the US Strategic Petroleum Reserve — have already been drawn down significantly since 2022. They are not at zero, but the emergency buffer is thinner than it was.

When the tank gets low enough, there is no gradual increase in prices. There is a sharp jump. That is the scenario that keeps oil market analysts up at night right now — not $100 oil, but what happens if Hormuz stays closed through July and global stocks hit critically low levels. Saudi Aramco’s CEO was essentially warning about exactly this.

What does this all mean for India and your petrol pump?

India sits in an uncomfortable position in all of this. It imports over 85% of its crude oil. Most of that crude travels through or near the waters affected by the Iran conflict. When Brent rises, India’s import bill rises — in dollars — and then that gets multiplied by a rupee that is already sitting at ₹95 to the dollar.

The four petrol price hikes in May 2026 — totalling ₹7.5 per litre — happened because OMCs could not absorb losses any longer. At $96 Brent and ₹95 rupee, analysts at Emkay Global estimate under-recoveries are still around ₹17–18 per litre. If Brent goes to $103–108 on a Hormuz escalation, OMCs face a new wave of losses and another hike cycle becomes unavoidable — probably ₹3–5 per litre in June.

On the other side: if a surprise ceasefire deal materialises and Brent falls to $84–89 quickly, OMCs get breathing room. They will not immediately cut retail prices — they will first use the margin to recover past losses — but a July price cut becomes a real possibility for the first time since the crisis began. See our full analysis of when petrol prices will actually fall in India for more on that timeline.

The Number That Decides Everything This Week

Watch Iran’s official statement on Hormuz before Friday. Iran has been ambiguous — effectively blocking traffic but not formally declaring the strait closed. A formal closure announcement would be the single biggest upward catalyst for oil prices in 2026, easily pushing Brent toward $108–115. Conversely, any signal of renewed talks — even back-channel diplomatic activity — would push Brent below $92 quickly. Gold at $4,525 is already pricing in continued uncertainty. Track live crude oil prices at FX Rate Live, updated every minute.

Three things to watch between now and Friday close

  • Iran’s next move on Hormuz — most important: After suspending US talks and the Israeli-Lebanese ceasefire being separately implemented, Tehran’s position on Hormuz shipping is the key variable. Any official statement tightening restrictions sends oil sharply higher. Any signal of renewed engagement sends it lower. Watch Reuters and CNBC headlines closely Tuesday through Thursday.
  • US NFP on Friday June 6, 8:30 PM IST: A strong jobs number above 200,000 signals US economic resilience, reduces Fed cut bets, strengthens the dollar and adds demand-side support to crude. A weak print below 120,000 raises recession fears, triggers risk-off selling and could push Brent below $90. The jobs number alone is a ±$4–6 mover for Brent in normal conditions. In the current geopolitical environment, combined with a Hormuz headline, it could be ±$10.
  • US crude inventory data (next week): Another 7–8 million barrel drawdown in next week’s EIA report would confirm that the market is in genuine supply stress, not just geopolitical panic. That confirmation would add a durable floor under oil prices regardless of ceasefire headlines. Expect this data to get significant attention if this week’s drawdown pattern continues.