The US-Iran peace agreement signed June 19 will fundamentally reshape oil markets. The Strait of Hormuz closure, which disrupted about 10.5 mb/d of Gulf production, was the single largest supply shock since the pandemic. Its resolution removes the war premium that supported prices above $100/bbl and resets the price floor to OPEC+ cost support levels around $70-75/bbl.
For procurement teams, the immediate impact is on existing hedges. Buyers who layered hedges when WTI was at $90-100/bbl during the conflict peak will face margin calls or opportunity costs. The strategic question is whether to maintain those hedges or restructure them at the lower forward curve.
The diesel (ULSD) premium to WTI is also normalizing. The EIA projects diesel to average $4.80/gal in 2026, down from conflict highs but still elevated versus 2025's $3.66/gal. RBOB gasoline should average $3.70/gal. The crack spread compression improves refinery margins for diesel buyers.
The EIA's June STEO increased US natural gas production forecasts, which will generate more NGLs. Watch for potential propane and butane price dislocations as supply patterns adjust. Marine fuel buyers should also monitor bunker fuel price convergence as Hormuz tanker routes reopen.
Review all oil and refined product hedges in light of the Iran deal. The $75-80/bbl forward curve is the new reference for H2 2026 planning. Avoid extending hedges at current levels if you expect a further correction as Iranian supply ramps. Use options structures (collars, three-ways) instead of outright swaps to leave room for further downside.