Crude oil held near multi-month lows as traders weighed a holding interim peace against the slow physical reopening of the Strait of Hormuz. West Texas Intermediate settled around $74.82 a barrel and Brent, the international benchmark, near $77.90, leaving Brent roughly 36% below its conflict peak above $120. Over four trading sessions in mid-June, Brent fell about $17 a barrel — what PVM analyst Tamas Varga called a vote of confidence that the worst of the supply disruption is behind the market.
The supply-return narrative gained an official seal this week. The U.S. Treasury issued a 60-day license authorizing the production, delivery, and sale of Iranian oil, payable in dollars and importable to the United States, formalizing the sanctions relief at the center of the deal. A senior U.S. official cautioned that Iran can access the agreement’s benefits only if it abides by its commitments, including not pursuing a nuclear weapon, neutralizing its enriched uranium, and not interfering with traffic in the strait.
The physical picture is improving but remains far from normal. Vice President Vance said tankers carrying more than 12 million barrels crossed Hormuz overnight, three Saudi supertankers carrying about 6 million barrels exited the strait after weeks of waiting with transponders off, and Kuwait lifted its force majeure declarations. Yet traffic is still a fraction of the prewar norm of 120 to 130 transits a day, more than 500 vessels are estimated to be waiting to exit the Gulf, and the channel is believed to contain an unknown number of Iranian naval mines that could take weeks to clear.
Shipping and insurance caution is the gating factor. The International Association of Independent Tanker Owners, INTERTANKO, called for greater clarity on the practical steps needed for safe passage, warning that without it, ships will be unsure whether to transit. The head of Mitsui O.S.K. Lines said many operators could wait weeks before resuming transits, and insurance rates remain elevated. As one analyst put it, the market is front-running a best-case normalization and may be underpricing the logistical and geopolitical hiccups still ahead.
Those hiccups are not hypothetical. The postponement of the Geneva signing ceremony, President Trump’s threat of renewed strikes on Iran, and a dispute over a Lebanon ceasefire all landed this week, any of which could restore a risk premium if they escalate. Analyst Vandana Hari of Vanda Insights noted that crude’s slide is entirely sentiment-driven, with the market pricing the best case for reopening and leaving little cushion for disappointment.
The demand side adds another layer to the debate. OPEC Secretary General Haitham Al Ghais rejected forecasts of a near-term demand peak and pushed back on IEA projections of a future glut, while analysts noted that Middle East supply near prewar levels partly reflects inventory liquidation rather than restored production — a distinction that leaves the market exposed once stockpiles are drawn down. For now, Brent looks likely to trade in a $75 to $82 band as attention shifts from war risk to the pace of normalization.
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