Brent and WTI oil prices are on track for their worst quarterly losses since 2020, with Brent trading at around $73.30 per barrel and WTI at $71.11 per barrel during the June 30 session, down 38% and 30% respectively.
The geopolitical premium linked to the impasse in the Strait of Hormuz is rapidly fading, as the market prices in the release of crude supply that had remained trapped in the Gulf until just a few weeks ago.
The reciprocal attacks between the United States and Iran, with Bahrain also involved, over the final weekend of June — carefully timed while markets were closed — were not enough to prevent what now appears to be a near certainty: the normalization of the Strait of Hormuz is expected to take place in a relatively short time frame.
That is currently the consensus among investors. However, the EIA paints a less optimistic picture. In its Short-Term Energy Outlook, the agency estimates a daily decline in global inventories at a pace of 6.3 million barrels per day in 2Q26 and 7.6 million barrels per day in 3Q26, with OECD inventories heading toward their lowest levels since 2003.
The EIA also notes that OECD inventories, measured in days of forward demand cover, could fall to 50 days by the end of 2026, the lowest level since the series began in January 2003.
The IEA is sending a similar message. In its June report, it pointed to an observed inventory drawdown of 143 million barrels in May, equivalent to -4.6 million barrels per day, and an average decline of 3.8 million barrels per day since the start of the Gulf conflict.
Fundamentals are far from normalized. Current traffic estimates do not even reach half the levels seen in the days before the conflict, while insurance risks, security concerns, and logistical backlogs remain significant.
Time is therefore working against US interests. If there is one actor in this conflict that has clearly understood the leverage it can use to secure favorable agreements — and that is politically willing to bear higher short-term costs — it is undoubtedly Iran.
This war has shown how relatively easy it can be to “control” a commercial chokepoint when large quantities of asymmetric weapons, such as drones, are available. This explains the Iranian regime’s determination to preserve the advantage it has gained by force. At present, the Strait of Hormuz is officially reopened, but container vessels must comply with Iran’s transit regulation system and pay regular passage fees.
For financial markets, this is a crucial turning point, impacting the trajectory of not only oil prices but also the broader equity market, including S&P 500 futures. Even though the Strait of Hormuz is open, if Iran insists on a formal role in managing traffic, shipowners and insurers may remain cautious even after a final U.S.-Iran agreement is reached. It is not enough for Hormuz to be “open”: it must also be perceived as safe, predictable, and insurable.
The damage to the oil market caused by this crisis is tangible. The IEA estimates that the near-closure of Hormuz generated cumulative losses of more than 1.3 billion barrels, with flows through the Strait falling from around 20 million barrels per day before the conflict to an average of 2.7 million barrels per day between March and May.
Despite the continued decline in prices, rebuilding inventories will take months. The lack of stock buffers leaves the market exposed to further shocks that are not yet reflected in current prices.