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By: Bruno Santos, Market Intelligence Analyst
Yesterday (08), the most active Brent futures contract closed up 1.3%, totaling USD 94.25/bbl, after reaching an intraday high above USD 94.80 and a low at USD 92.90. WTI ended the session at USD 91.30/bbl (+0.8%). The movement reversed the previous session's bearish pressure, driven by the escalation of mutual attacks between Iran and Israel, with a direct impact on geopolitical risk expectations and supply via the Strait of Hormuz.
Monday's rally was initially underpinned by concerns over further logistical disruptions, with Israel targeting Iranian petrochemical facilities and Iran retaliating with offensives in the Haifa region. However, confirmation, early in the day, of a pause in hostilities between both sides contributed to a reduction in the gains posted.
This morning (09), around 08:00 am, Brent was down 1.9% at USD 92.4/bbl, with WTI declining 2.1% at USD 89.37/bbl. Market participants interpret the ceasefire announcement between Iran and Israel as a partial normalization, temporarily reducing the risk premium, but the maintenance of blockades in the Strait of Hormuz and the deadlock in Beirut support volatility. The scenario prices in a fragile ceasefire, with persistent stress on physical flows and the possibility of curve reversal should hostilities intensify.
After three months of conflict, Iran and Israel announced the suspension of mutual attacks in response to an appeal from President Donald Trump, without resolution regarding Israel's campaign in Beirut and logistical blockades.
Why it matters: Even with the ceasefire, additional controls and higher transit rates increase costs, limiting arbitrage and barrel availability, especially to Asian markets. There has been partial normalization in flights and port operations in Tehran, but risks of reversal and shortage remain. The maintenance of logistical blockades implies pronounced volatility and structural risk premium, with potential impact on regional spreads and storage, ultimately affecting major producers concentrated in the Persian Gulf.
What to expect? As long as operational restrictions in the Strait of Hormuz and instability in Beirut persist, Brent is expected to oscillate between USD 90–100/bbl, with sensitivity to any resumption of hostilities.
According to market estimates, Russia will reduce oil exports in June to 1.7 mbpd—a volume 32% lower than observed in May—driven by increased domestic processing and decreased production caused by Ukrainian attacks.
Why it matters: The decline in Russian exports reduces global availability of heavier crudes, increases the risk premium, and complicates inventory replenishment, especially in Europe and Asia. The inability to quickly restore production makes relief for the balance dependent on alternative sources. Logistical stress may accentuate price swings, intensifying volatility if disruptions persist.
What to expect? If maintenance and repair conditions do not advance, Russian exports are expected to remain restricted, widening the global deficit and sustaining oil prices at elevated levels.
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