Oil and gas prices could stay elevated through late summer even if the Strait of Hormuz reopens soon, Rapidan Energy Group President Bob McNally warned on Sunday, pointing to depleted strategic reserves and more than a billion barrels of oil lost to the war in Iran.
“The shock absorbers that the global oil market has benefited from in March and April and May are starting to wear off,” McNally said on ABC News’ “This Week.” The US Strategic Petroleum Reserve fell by another 7.9 million barrels between May 29 and June 5, according to the Energy Information Administration, as the global supply disruption deepened.
McNally said “oil will flow” if Washington and Tehran reach a deal that holds, but warned that without one prices could surge to the mid-$100s range and US pump prices could hit a new high of $5 a gallon. The national average gasoline price stood at $4.07 a gallon on Sunday, according to AAA. Brent crude settled at $82.25 a barrel on Friday and US crude at $84.29, both down less than 1 percent on the day and well below the $100-plus levels reached in March. Reopening the Strait of Hormuz, which carries about a fifth of the world’s oil flows, is considered crucial to ending what McNally described as the largest oil disruption in history.
For Sri Lanka, prolonged elevated oil prices through September would extend the pressure on the trade account. The country’s monthly fuel import bill hit US$886 million in April, up 149.9 percent year-on-year, and CBSL has confirmed that the rupee has depreciated 7 percent so far in 2026, partly driven by the Middle East conflict. Iran and the US have moved closer to a framework deal, with Tehran demanding US$24 billion for war damages and Hormuz transit guarantees, but a signing date has yet to be confirmed.
