By: Editorial Team, StoneX Media
For much of the past decade, OPEC has functioned as the backstop of global oil supply management, with member compliance largely dictating whether prices held or fell. A sudden closure of the Strait of Hormuz stress-tested that architecture in ways few anticipated, sending futures prices sharply higher while physical supply chains struggled to adapt at the same speed. Now, as talks advance toward reopening the Strait and prices fall back, a quieter development is drawing attention: two of OPEC's most significant Gulf members, the United Arab Emirates and Iraq, are moving toward supply and export strategies that operate increasingly outside the cartel's framework. Whether this marks a temporary tactical divergence or a more durable structural shift has significant consequences for European energy security and the price environment ahead.
Marco Saggese is Vice President, Clearing and Execution Sales at StoneX in London, where he works with institutional and commercial clients on futures clearing and execution. His career in energy sales and broking spans multiple oil price volatility cycles, and his work covers energy derivatives, margin dynamics, and the capital flows that respond when supply disruptions move the oil market.
The departure of the United Arab Emirates and Iraq from OPEC represents one of the more structurally significant developments in global oil supply in some time. Rather than working within the cartel's coordinated output strategy, both producers are pursuing independent supply and export routes, a move with implications for price formation well beyond the current cycle. "UAE leaving OPEC, Iraq the same. So, we're looking at new supply possibilities coming through outside of OPEC. And we've also seen the ability to not use the Straits of Hormuz and to get all the products out through other avenues." The shift reflects a broader pattern in which the Strait's temporary disruption accelerated the development of alternative routing that was already underway, and which will likely persist regardless of how Hormuz negotiations conclude. For Europe, a more fragmented supply base means a wider range of import options, but also a more complex set of relationships to manage as supply certainty is distributed rather than cartel-controlled.
The most direct lever on the European supply picture in the near term remains the pace of Iran's return to full market participation. Futures prices have already moved sharply lower in anticipation of a deal, but as Saggese notes, the more meaningful adjustment comes when physical supply catches up with what the derivatives market has already priced in. "Assuming that carries on in that vein, we'll see physical prices catching up with the futures prices. We've seen quite a sharp drop in the prices recently, with the potential for that to possibly even carry on." Venezuela is also back online, adding crude and product volumes alongside renewed Hormuz throughput, while the lifting of sanctions on product produced from Russian crude provided a short-term supply bridge for European buyers during the peak disruption period. In his view, the combination of Iranian production, Gulf non-OPEC alternatives, and greater routing flexibility points toward a period of genuine supply ease after sustained constraint. "With Iran coming back on fully, supply issues are just going to be something which is going to be quite easy really for most nations around the world."
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--- Written by Gus Farrow, Senior Manager, StoneX Media
--- Expert: Marco Saggese, StoneX VP of Clearing & Execution Sales
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As Gulf producers UAE and Iraq develop supply routes outside OPEC's framework, the cartel's grip on global oil output is weakening in ways that go beyond the immediate Hormuz disruption. The shift has direct consequences for European energy security, opening new supply options but also requiring buyers to navigate a more fragmented and less predictable production landscape.
June 26 – Chip stocks weighed on stock futures overnight, contributing to general weakness across the board as Iran tries to take control of the Strait of Hormuz once again, testing the fragility of the ceasefire. The VIX elevated to trade near 21 this morning, while the dollar index slipped lower to trade near 101.1. Yields on 10-year Treasuries are trading near 4.40%, while yields on 2-year Treasuries are trading near 4.10% as the yield curve steepens a bit this morning. WTI crude oil traded back below $70 per barrel this morning, as Brent traded near $73, while the grain and oilseed markets traded mostly weaker as well ahead of the weekend.
June 25 – Stock futures pushed higher overnight, led by the tech sector, ahead of a plethora of key economic data released this morning, including durable goods orders for May and PCE inflation data. That data gave another initial modest push to those gains when released. The VIX is trading below 18 at this hour, while the dollar index trades near 101.6. Yields on 20-year Treasuries are trading near 4.38%, while yields on 2-year Treasuries are trading near 4.11%. WTI crude oil made new post-war lows this morning below $69 per barrel on reports that oil flows through the Strait of Hormuz have returned to pre-war levels, while the grain and oilseed sector was mixed, with corn and wheat prices again under modest pressure while soybeans posted modest gains.
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