24.06.2026 - Oil flows again
More oil tankers are once again openly crossing the Strait of Hormuz as diplomatic efforts between the United States and Iran continue to make progress. Both Washington and Tehran have signaled early advances toward ending the conflict, although negotiations are expected to be lengthy and both sides continue to present differing interpretations of the discussions.
As fears of a prolonged disruption to global oil supplies continue to fade, crude prices have extended their recent decline.
Markets:
Crude prices fell to their lowest levels since March. WTI declined to around USD 71 per barrel, while Brent slipped toward USD 74 per barrel.
My View: US President Trump appears to have realized that lower oil prices are essential to relieve the US economy and consumers from high energy costs. The easiest way to achieve this is to let Iranian oil flow again and pay a political price Iran is willing to accept in exchange for keeping the Strait of Hormuz open.
The market is increasingly pricing in a scenario where the Strait remains open and the risk of a major supply disruption continues to diminish. While negotiations are still at an early stage and far from a final agreement, falling oil prices suggest investors are becoming more confident that the worst-case scenario can be avoided.
Even if a lasting agreement is reached, it will take time before global oil flows fully normalize. Supply chains were abruptly disrupted at the end of February, shipping routes had to be rerouted, and parts of the energy infrastructure were damaged during the conflict. Restoring production, repairing infrastructure, and rebuilding normal logistics cannot happen overnight.
As a result, while geopolitical risk premiums may continue to decline, the physical recovery in oil supply is likely to be a gradual process rather than an immediate return to pre-conflict conditions.
Lower energy prices would ease some global inflationary pressures and reduce the risk of aggressive monetary tightening by central banks.
However, I remain cautious. The negotiations are likely to be complex, and geopolitical headlines can change quickly. Any setback in the talks could trigger another sharp rebound in oil prices and increase market volatility.
I already took some chips off the table on my oil position early last week, while keeping a certain allocation in case the talks end without a deal or the situation re-escalates, a scenario that, in my view, still carries a meaningful probability.
For now, the direction of travel looks encouraging, but it is far too early to declare victory.
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