Crude oil markets rallied sharply on Monday, May 11, 2026, after President Trump on Sunday publicly rejected Iran’s counterproposal to end the war. WTI June futures advanced 4.96% to settle at $100.30 per barrel, crossing back above the psychologically significant $100 mark. Brent July futures gained 4.92% to settle at $105.76 per barrel. The rally erases most of the relief move that followed the May 5 reports that the United States and Iran were close to a 14-point memorandum of understanding, when WTI had crashed as much as 13% intraday to a low of $88.71.
Trump’s Truth Social post Sunday rejecting Iran’s counterproposal as “TOTALLY UNACCEPTABLE” was the catalyst. He followed Monday morning with reporters, telling them the ceasefire is “on massive life support, where the doctor walks in and says, ‘Sir, your loved one has approximately a 1% chance of living.’” The same day, Trump threatened on Truth Social: “If they don’t agree, the bombing starts, and it will be, sadly, at a much higher level and intensity than it was before.” The geopolitical risk premium that markets unwound through last week has now re-embedded into futures.
Implied volatility climbed in tandem. Near-dated WTI call options saw the largest daily implied-vol increase since the early April hostilities. Brent futures contracts for delivery in six months posted strong gains as the market priced not just immediate disruption but extended duration. Saudi Aramco CEO Amin Nasser warned on a Monday analyst call that the market is losing roughly 100 million barrels of supply each week and that if reopening of the Strait of Hormuz is “delayed by a few more weeks, then normalization will last into 2027.”
Citi maintained that risks to oil prices remain tilted to the upside. The bank’s base case assumes the Iranian regime makes a deal that reopens the strait around end-May, but the bank flagged downside risk that the timeline is pushed out and/or a partial reopening leaves disruptions in place for longer. Goldman Sachs separately held its previously raised Q4 Brent forecast of $90 per barrel. The structural supply deficit limits any deep crude pullback because GCC production capacity has sustained damage during the conflict and insurers remain reluctant to service tankers crossing the strait.
Refined products tracked crude higher Monday. Gasoline RBOB jumped roughly 4% to $3.42 per gallon. ULSD diesel and heating oil both rose around 4% to $4.12. Jet fuel climbed 4% to $4.49. The strength in refined product cracks reflects continued tight inventory: U.S. gasoline stocks have fallen for 12 consecutive weeks; distillate fuel stocks declined for nine weeks straight. Refiners running flat-out to capture record crack spreads will continue to support input crude demand even as headline crude prices fluctuate on diplomatic headlines.
AAA reported the U.S. national retail gasoline average at $4.520 per gallon Monday May 11, down about 3 cents from the May 8 peak of $4.546. The modest pullback reflects the multi-day lag from last week’s crude crash. Monday’s rally back above $100 WTI will reverse the retail decline within one to two weeks. California remains the highest-priced state at $6.16 per gallon; Hawaii $5.65. Pump prices are still $1.40 higher than a year ago and at their highest level since 2022.
Prediction-market positioning shifted sharply Monday. Kalshi traders moved odds of WTI reaching $127 at some point in 2026 from roughly 50% on Friday to over 65% Monday afternoon. The shift reflects the market re-pricing not just current spot risk but the option value of further escalation. The next major test will come from Iran’s response to Trump’s renewed threats and from any U.S. action in the days ahead of the President’s scheduled Beijing visit. For continuing coverage, see our live oil prices dashboard.