Yesterday (June 23), the most active Brent contract closed down 3.1% at USD 77.90/bbl. WTI settled at USD 73.86/bbl (-2.8%).
The US granted a 60-day sanctions waiver to Iran—allowing the country to sell oil to the global market, not just traditional buyers—which was the primary driver of bearish pressure. The expectation of reintegration of Iranian oil into global supply, combined with the gradual reopening of traffic through the Strait of Hormuz, reversed much of the risk premium that had supported prices since the closure of the route in March.
Around 7:20 am this morning (June 23), Brent was down 0.6% at USD 77.46/bbl and WTI declined 0.4% at USD 73.56/bbl. The market is pricing in progress in US-Iran negotiations but remains cautious due to divergences on the nuclear program and operational uncertainties in the Strait.
Iran sanctions waiver and partial reopening of the Strait of Hormuz
The US Treasury announced a sanctions waiver for Iran until August 21, following a round of negotiations in Buergenstock, Switzerland. The agreement also includes communication mechanisms to ensure safe passage of commercial vessels through the Strait of Hormuz, with tracking records showing two VLCC-type tankers transporting about 2 million barrels through the strait on Monday (22).
Why it matters: The waiver redirects Iranian oil to global buyers, increasing available supply without requiring an immediate ramp-up in production from Persian Gulf countries. The resumption of traffic through the Strait of Hormuz—even if gradual—signals a partial normalization of physical flows, reducing the risk premium embedded in prices since the route’s closure. If the agreement persists, the market is likely to reprice the supply-demand balance with a short-term bearish bias.
Outlook: The waiver authorizes exports of Iranian oil and petrochemicals and partial unfreezing of assets; divergences remain over nuclear inspections and the use of released resources.
• Technical teams from both sides continue negotiations throughout this week, with a 60-day deadline for a definitive agreement.
• It is estimated that roughly 400 vessels inside the Persian Gulf will begin to move near the Strait of Hormuz, with maritime companies showing greater confidence in a possible passage out of the gulf. Nonetheless, vessels await a green light from Tehran and Washington before resuming movements.
What to expect? As long as negotiations progress without disruption, Brent is likely to remain under bearish pressure, with a potential reopening of the Strait keeping futures at lower levels. Should Iran resume restrictions on traffic or talks collapse, the risk premium will likely materialize rapidly. The persistence of divergences over the nuclear program remains the primary risk for agreement reversal.
Refining crisis in Russia intensifies restrictions on oil products
Ukrainian attacks on Russian refineries caused a 25% drop in gasoline production compared to the daily average for June 2025, with supply falling to around 765 thousand barrels/day. Seaborne exports of oil products declined 15% in the first half of June versus the first half of May, totaling about 3.3 million metric tons. The Russian government is considering importing subsidized fuels to contain prices and reduce lines at gas stations.
Why it matters: The reduction in Russian oil product exports lowers available supply in markets dependent on those flows, supporting diesel and jetfuel crack spreads. The need to import fuels inverts Russia’s role in the global oil products balance, with potential to apply additional pressure on supply routes in Europe and Asia. For Brazil, a diesel importer, decreased Russian supply to the global market may increase acquisition costs should the crisis deepen.
Outlook: Four Russian regions are experiencing sales restrictions, price hikes, and lines at gas stations, with the crisis deepening primarily in Siberia.
- A meeting with Deputy Prime Minister Novak discussed subsidized imports as an emergency price containment measure.
- It is worth noting that earlier this month, Russia banned jetfuel exports amid supply risks. Now, market attention is shifting to diesel, with concern about similar measures for middle distillates.
What to expect? The Russian refining crisis is expected to keep the global oil products market tight in the short term, especially if further attacks occur. As long as Russian diesel exports remain reduced, the crack spread for the product is likely to stay elevated—directly impacting Brazil’s import costs. If Russia implements subsidized imports on a meaningful scale, it may ease domestic pressure but will not offset the decline in exports.
Global race to replenish strategic reserves
The war in the Strait of Hormuz exposed the fragility of strategic inventories in importing countries. The IEA coordinated a record release of 400 million barrels; the US reduced its Strategic Petroleum Reserve to the lowest level since June 1983, with 331.2 million barrels registered last week. India, Pakistan, Australia, and Singapore announced plans to expand inventories.
Why it matters: The replenishment demand—estimated at up to 1 billion barrels between new inventory builds and replacement of already drained reserves—offers medium-term structural support to prices, even with increasing supply. India, with reserves equivalent to only 8 days of imports, falls well short of the IEA’s 90-day standard, and any large-scale buying activity will impact global physical flows. Global supply fragility persists even after the Strait’s normalization.
What to expect? The need to rebuild inventories should support prices above what short-term supply fundamentals would suggest, especially if Middle Eastern production recovers more slowly than expected. The current scenario presents immediate bearish pressure from geopolitical relief, but medium-term support from replenishment demand. If Persian Gulf production recovery is delayed by logistical issues or regional instability, the global balance will remain fragile for a longer period.
