By: Bruno Santos, Market Intelligence Analyst
Yesterday (06/17), the most active Brent futures contract closed up 0.75% at USD 79.55/bbl. WTI settled at USD 76.79/bbl (+0.97%). The session reflected a mild recovery after a sequence of sharp declines in previous days.
Trump's statement that the memorandum of understanding with Iran "is not definitive" and that bombing campaigns could resume if the country does not "behave" reintroduced a risk premium to the market—briefly interrupting the downward price trajectory following the ceasefire agreement announced on Sunday (06/14). The combination of diplomatic uncertainty and the tenth consecutive draw in US inventories, reaching their lowest level since 1985, sustained a bullish bias during the session.
This morning (06/18), around 08:00 AM, Brent was down 2.00% at USD 77.96/bbl, and WTI dropped 2.38% to USD 74.96/bbl—lows since the start of the conflict. The market is pricing in accelerated barrel deliveries with the anticipated reopening of the Strait of Hormuz and easing of sanctions on Iranian crude.
The US and Iran digitally signed a 14-point memorandum that formally ends the conflict, suspends the naval blockade, and provides for full restoration of traffic through the Strait of Hormuz within 30 days. The agreement initiates a 60-day negotiation period in Geneva and includes immediate waivers for Iranian oil and petrochemical exports, as well as a USD 300 billion plan for Iran's reconstruction.
Why does it matter: The reopening of the Strait of Hormuz releases an estimated 93 million barrels of non-Iranian oil held in the Persian Gulf, along with approximately 72 million barrels of Iranian oil stored on tankers—a volume that puts direct short-term pressure on prices. In the medium term, the removal of sanctions brings Iranian oil back to the global scale, deepening the surplus already projected by the IEA for 2027.
Overview: Among the 14 points in the memorandum of understanding are:
What to expect? The current outlook is for a gradual price decline as flows through the Strait of Hormuz normalize, without an abrupt collapse since countries will need to replenish strategic reserves. Should negotiations stall over issues such as the Iranian nuclear program or the situation in Lebanon, part of the risk premium may return. If Beijing resumes spot purchases at scale—contingent on flexible export quotas for derivatives—Asian demand may absorb part of the supply surplus and limit further downside.
Total US crude inventories fell for the tenth consecutive week, reaching the lowest level since 1985, according to EIA data released yesterday. Strong demand and disruptions to Middle East routes accelerated consumption of strategic and commercial stocks at unprecedented scale in recent times.
Why does it matter: Depressed inventories support prices in the short term, but the situation reverses rapidly with resumption of flows through the Strait of Hormuz—with the IEA projecting a relevant oversupply by 2027. Accordingly, the market should continue to observe sustained pricing versus the pre-war period in the short term, while toward the end of 2026 and early 2027, healthier reserve levels should drive more pronounced bearish pressures.
What to expect? As global inventories remain depleted, price declines tend to be contained—with governments and companies using released crude mainly for reserve replenishment, not just immediate consumption. The main risk is the speed of Iranian normalization: a faster-than-expected return deepens the contango and accelerates downward repricing.
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WTI and Brent crude are moving to different beats as a possible U.S. Iran deal reshapes the oil market. The two benchmarks are pricing Strait of Hormuz risk in their own ways, and the gap between them says a lot about where crude goes next.
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