Oil prices have seen fluctuations despite an interim peace deal between Washington and Tehran, which initially eased concerns over supply disruptions from the Middle East and led to a 30% drop in oil prices during the second quarter. The global benchmark Brent crude had erased the "war premium" that accumulated previously, with Brent moving towards $73 a barrel and West Texas Intermediate nearing $69. However, attacks on vessels in the Strait of Hormuz, such as the natural gas carrier Al Rekayyat being hit near Oman, have reintroduced a "risk premium" to the market, highlighting the fragility of the de-escalation.
Leading banks like Goldman Sachs Group Inc. and Morgan Stanley had warned of a potential glut returning to the market. Goldman Sachs recently cut its fourth-quarter crude forecast to $80. However, the recent tanker attack underscores that normalization in the Middle East is far from complete, according to Warren Patterson, head of commodities strategy for ING Groep NV. He noted that while a contained response from the US might offer short-term support, any bounce in prices would likely be short-lived given bearish sentiment and weakness in the physical market.
Macquarie Group also lowered its Brent crude forecasts, anticipating it to average $77 a barrel in 2026, down from an earlier forecast of $89, and $64 a barrel in 2027, down from $74. This reduction comes amid expectations that Middle Eastern oil supplies will normalize faster than previously anticipated due to the interim peace agreement. Despite some recovery, traffic through the Strait of Hormuz remains below pre-conflict levels, and some shipowners are still reluctant to resume full operations. Saudi Aramco, the world's largest oil producer, has also lowered its August official selling price for Arab Light crude to Asia by $11 a barrel, or $1.50 below a benchmark, in a decision following OPEC+ increasing output quotas for next month. This move suggests a desire to raise production as conditions normalize, despite ongoing uncertainties.
