Key facts
- Oil prices declined as U.S.-Iran talks progressed.
- Tehran secured waivers for oil and petrochemical exports.
- Brent crude fell below $80 per barrel.
- Morgan Stanley, Goldman Sachs, and Citi cut oil price forecasts.
- Oil flow through the Strait of Hormuz is nearing normal.
- Qatar is moving LNG tankers into the Strait of Hormuz.
- Kuwait is requesting customers collect refined petroleum from Persian Gulf ports.
- Iranian crude sellers have lowered prices for Chinese buyers.
- Global oil inventories remain depleted, according to some analysts.
- Shipping data showed a sharp fall in vessel transits on Sunday after Iran announced it had closed the waterway.
Oil prices have seen a notable decline, with Brent crude falling below $80 per barrel, a drop of 16% in a week, following progress in U.S.-Iran talks and the prospect of eased supply fears. Major financial institutions, including Morgan Stanley, Goldman Sachs, and Citi, have responded by cutting their oil price forecasts for late 2026 and 2027, anticipating increased oil exports via the Strait of Hormuz due to a preliminary peace deal between the U.S. and Iran. This development is expected to offer relief to countries like India, potentially narrowing its trade deficit by reducing energy import costs and easing inflationary pressures.
Despite Iran's actions, including the closure of the Strait of Hormuz, energy officials report that oil flow through the vital waterway is nearing normal levels, with increased ship traffic observed. Qatar is actively moving LNG tankers into the Strait of Hormuz, signaling efforts to resume liquefied natural gas exports despite ongoing repairs at the Ras Laffan complex. Kuwait has also requested customers to collect refined petroleum from its Persian Gulf ports as regional producers aim to boost production amid this increased traffic. Furthermore, sellers of Iranian crude oil destined for China have significantly lowered their prices in the wake of the interim peace agreement.
While the prospect of increased supply is driving down futures, some analysts caution that global oil inventories remain depleted, tempering immediate optimism about substantial supply increases. The market is seeing a resurgence of options betting on an oil glut, though this optimism is tempered by the underlying inventory situation. The U.S.-Iran peace deal is expected to facilitate the resumption of oil and petrochemical exports from Iran, contingent on securing waivers.