The Strait Delivers.
The BTA Doesn't.
The peace deal has been tested — and so far, it is holding. Crude is now below $73 and at pre-war levels. But the India-US trade deal just hit its most complicated week yet, the RBI governor has pushed back on rate hike talk, and gold in India has quietly slipped another ₹8,000 from last week's close. The week that was supposed to be simple turned out to be anything but.
at pre-war levels
market shut Fri Jun 26 (Muharram)
stabilising off ₹96.84 peak
down ~21% from Jan peak
The Physical Market Answers the Paper Market
A week after the MOU was signed, vessel traffic data does the confirming — but risks remain
Last week, Brent fell from $95 to $79 on the announcement of the Iran-US MOU. The question this week was whether the physical oil market — tankers, insurance, freight — would confirm what the paper market had already priced. The answer, by mid-week, was a qualified yes, and crude fell further.
The formal technical talks in Switzerland were abruptly cancelled on June 19 — Iran withheld its delegation, demanding a guarantee that Israel cease its military campaign in Lebanon before negotiations could proceed. The White House publicly cited unresolved logistics and said Vance was prepared to travel but the plans could not be finalised; Tehran's Lebanon condition was the underlying reason. But crucially, the Strait remained open anyway. Three Saudi supertankers carrying approximately 6 million barrels exited Hormuz on June 19 with transponders broadcasting — the first Saudi vessels to do so since March. The UAE was reported by the IEA to be exporting at nearly 85% of pre-war levels. By June 24, Brent had fallen to around $76, its lowest since before the conflict, fell below $74 on June 25, and slid further to ~$73 on June 26. WTI was approaching $70. The prompt spread on Brent flipped into contango for the first time since the conflict began — a technical signal that the physical market now sees future supply as adequate, not scarce.
Shipowners are transiting the strait with active satellite signals following IMO safety guarantees. Crude has now dropped roughly 40% from the wartime peak above $120. Saudi tankers are heading toward Ras Tanura to restart Persian Gulf exports. A temporary US waiver permitting purchases of already-loaded Iranian oil is expected to boost available supply further. The contango shift is the clearest single signal that physical markets now see a supply surplus forming — not a shortage.
Analysts broadly see Brent trading in the $72–80 range near-term, with the cancelled Switzerland talks a reminder that the MOU remains interim, not resolved. Tehran has specified that vessels will require mandatory insurance to transit — a detail keeping underwriters in a position of influence over the pace of normalisation. For India, the import bill arithmetic is materially better than a fortnight ago even accounting for those caveats. The secondary risk now: Iraq has threatened to leave OPEC unless its production quota is raised — a potential new variable in the supply picture that Section 9 of this briefing examines in full.
→ Bottom line: The physical reopening has been confirmed by vessel traffic data, not just political announcements. That is the distinction that mattered this week. Watch Brent's $80 level — a sustained break back above it would mean the market is reassessing implementation risk.