Oil Just Posted Its Worst Month Since COVID

The Big Story: The Price That Pays Your Bills Just Fell 20%

In May 2026, Brent crude fell more than 19%, from above $118 per barrel in April to close at $92.56. That is the largest monthly drop since March 2020. The driver was an Iran ceasefire, with the Strait of Hormuz reopening as part of the terms. Markets priced the outcome before the paperwork was done.

As of May 29, the deal was not signed. Trump added new demands, including destroying Iran's enriched uranium stockpile, that Iran has not accepted. The market bought a resolution that has not arrived. If the deal holds, physical supply through the Strait is still months away. If it collapses, oil snaps back sharply.

This matters for expats on two levels. Energy-driven inflation, at 3.8% in the US and 3.0% in the eurozone, could ease if oil holds below $95, real relief on the purchasing power of your euros and pounds. Whether rates follow depends on Kevin Warsh's first Fed meeting on June 16-17. The rate should hold at 3.50 to 3.75%; what markets are watching is the language, whether Warsh signals the next move is up rather than down.

What Else Is Moving

Gold is holding above $4,500 despite the safe-haven unwind. Gold closed May near $4,543 per troy ounce, up around 20% for the year, roughly €3,915 or £3,390. Iran deal optimism unwound some of the safe-haven bid, but the metal held better than most expected. (Sources: TradingKey, Kitco.)

The European Central Bank looks set to raise rates on June 11, the opposite move to the Fed. Eurozone inflation hit 3% in April on the same oil shock, and markets expect the ECB to lift its deposit rate from 2%, with another increase priced by year-end. So three big central banks are pulling in three directions in the same fortnight: the ECB tightening, the Fed holding, the Bank of England easing. A rate gap moving in the euro's favour tends to support it, which matters for anyone earning, holding, or converting euros. (Sources: ECB, RTE.)

The S&P 500 held all-time highs despite an unsigned deal and a hawkish Fed. The index closed May at 7,580, its eighth straight week of gains, with 84% of Q1 reporters beating earnings. Equities keep passing inflation through to customers. The tail risk: the deal collapses, oil spikes, and Warsh leans hawkish on June 16. (Sources: CNBC.)

MYR and SGD hold steady as oil easing complicates the regional picture. USD/MYR is near 3.96, the stronger end of its 12-month range. Malaysia is a net oil exporter: sustained lower prices trim the fiscal tailwind that has supported the ringgit. Bank Negara held at 2.75% in May, expected to stay there through year-end. GBP/SGD is around 1.72. For expats earning locally with obligations in GBP or EUR, the conversion picture is broadly unchanged. (Sources: BNM, MAS, TradingEconomics.)

The Expat Takeaway

Oil fell 20% in a month while inflation held at 3.8% in April. Both are true, and they point in opposite directions. Three diagnostics.

Does your energy exposure run one way or two? A Dutch executive in Singapore with euro savings is a net beneficiary if lower oil feeds through to eurozone inflation. A Spanish O&G executive in Abu Dhabi faces softer income alongside cheaper costs. Same move, opposite outcomes.

Is your cash earning above inflation? At 3.65% on US dollar deposits against 3.8%, the margin was already thin. If energy pulls inflation toward 3.0%, cash earns its first real return in nearly a year, but only if the deal delivers.

What is your rate sensitivity into a fortnight of central-bank meetings? The ECB likely hikes on June 11; Warsh's language on June 16 carries more weight than the decision itself. If you earn in euros and spend in ringgit or baht, that gap is your story this month.

If your structure accounts for a higher-for-longer world, oil can move 10% either way and the answer stays the same. If it does not, this is the month the gap becomes hard to ignore.