TLDR
- Brent crude tumbled beneath $83 per barrel on Tuesday, tracking toward its steepest weekly decline of 2026
- An imminent US-Iran agreement to restore access through the Strait of Hormuz will be formalized in Switzerland this Friday
- Goldman Sachs slashed its Q4 Brent projection to $80 per barrel, representing a $10 reduction from prior estimates
- Morgan Stanley similarly revised downward, now forecasting Dated Brent will average $90 during Q3
- Data released Monday revealed US emergency petroleum stockpiles have reached their most depleted state since 1983
Crude oil prices extended their losing streak to four consecutive sessions on Tuesday following news that Washington and Tehran have reached an accord to reopen the Strait of Hormuz, fueling expectations of a substantial supply influx. Both Brent crude and West Texas Intermediate benchmarks are poised for their steepest weekly losses in 2026.
Brent slipped beneath the $83 per barrel threshold during early European market hours, while WTI hovered around $81. The two primary benchmarks have collectively shed approximately 9% over the current week.
Washington and Tehran are scheduled to formalize an interim arrangement in Switzerland this Friday. The agreement is anticipated to permit Persian Gulf petroleum shipments to flow once again through the strategic waterway, which facilitates roughly one-fifth of global oil supply.
President Donald Trump confirmed the strait would resume operations Friday. “We have a lot of lanes right now already,” he stated during a press briefing at the G7 summit in France. “It’s going to be open and it’s toll-free.”
Major Banks Slash Price Projections
Goldman Sachs now anticipates Persian Gulf shipments will rebound to pre-conflict volumes by late July. The investment bank reduced its fourth-quarter Brent projection to $80 per barrel, down from a previous $90 estimate.
Morgan Stanley has similarly adjusted its predictions. The firm now projects Dated Brent will average $90 per barrel throughout the July-September period, revised down from an earlier $100 forecast. Its fourth-quarter estimate dropped $15 to $80.
RBC Capital Markets adopted a more conservative stance. The firm’s analysts suggested restoring pre-conflict flow volumes could require several months. “Peak Hormuz flows may actually be in the rearview mirror,” the institution noted.
Industry Hesitation Persists
The complete text of the US-Iran agreement remains undisclosed. Maritime executives and commodity traders emphasized they require additional specifics before deploying vessels along the route.
Persian Gulf energy authorities reported receiving substantial volumes of inquiries from purchasers questioning whether crude shipments could resume passage through the strait. However, ambiguity surrounding operational protocols and maritime security has maintained market hesitation.
Brent’s prompt spread, an indicator of immediate supply constraints, contracted to 83 cents per barrel. One month prior, this metric exceeded $4, illustrating the rapid transformation in market sentiment.
The effective blockade of Hormuz had already depleted US emergency petroleum reserves to their lowest point since 1983, according to statistics published Monday.
The International Energy Agency is scheduled to publish its monthly market assessment on Wednesday, potentially offering additional clarity regarding the supply landscape.
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