WTI crude oil is trading at $69-70/bbl on the NYMEX as of June 27, the lowest since February 2026. Brent crude is at approximately $74.50/bbl. Both benchmarks have collapsed from April 2026 peaks above $110/bbl and $119/bbl respectively, when the Strait of Hormuz was effectively shut down during the US-Iran conflict.
The trigger for the sell-off was the Islamabad Memorandum, an interim ceasefire agreement between the US and Iran signed in mid-June. The deal ends the active war phase and reopens the Strait of Hormuz, through which approximately 20% of global oil flows. Strait of Hormuz traffic has recovered from a May low of about 9.6 million barrels per day to roughly 12 mb/d in early June, though full normalization is gradual due to mine clearing and infrastructure repairs.
OPEC+ dynamics add to the supply picture. A core group of seven members (Saudi Arabia, Iraq, Kuwait, Algeria, Kazakhstan, Russia, Oman) has approved four successive quota increases from April through July, adding almost 600,000 barrels per day by June, with a further 188,000 b/d scheduled from July. These increases were authorized during the supply crisis but are now materializing just as the demand picture softens.
EIA data shows US commercial crude oil inventories decreasing in June, with refineries processing 17.1 million b/d at 96.1% utilization for the week ending June 19. US production remains near prior levels around 13.2-13.5 mb/d, but the demand signal is mixed as refinery runs show slight declines week-over-week.
The macro picture adds further headroom for lower prices. Iran sanctions relief could bring an additional 500,000-700,000 b/d to market within 6-12 months if the negotiations lead to a final deal. Combined with OPEC+ quota increases and moderating global demand growth, analysts see a risk of the market flipping from deficit to surplus in H2 2026.
The war premium is gone and supply is growing. For buyers, this is the best pricing environment since February. Consider locking in 6-month forward contracts at current levels if your budget allows. The next risk to watch is the 60-day negotiation window under the Islamabad Memorandum — if the final deal collapses, the Hormuz risk premium could return overnight. Ladder your hedges: cover 50% of Q3-2026 needs now, roll the rest after the next round of US-Iran talks.