Economy News

Brent falls back to its pre-war $72 as Hormuz reopens, erasing the Iran war premium

Brent crude ended the week on Friday 26 June at about $72 a barrel after a 10% weekly fall, back to its level before the US attack on Iran on 28 February, Oilprice.com reports. MEED says Brent dropped to $72.40 on 25 June, below its price on the day before the conflict began, and was around $73 on 26 June. Crude flows through the Strait of Hormuz reached their highest weekly tally since the war began, with more than 16 million barrels passing on Wednesday and Thursday, though transits remain a small fraction of the normal 130–140 a day.

The slide began when the US and Iran reached an initial deal to end the war. Khaleej Times, carrying Reuters, reported on 15 June that Brent fell $4.08 to $83.25 and US crude $4.35 to $80.53 after Trump said the strait would be open “toll free” and the US naval blockade of Iranian ports would end.

“The geopolitical risk premium that had been built into crude is now being unwound quite aggressively” — Tim Waterer, KCM Trade, via Khaleej Times

How each outlet framed it

• Khaleej Times (Reuters) — the deal terms, with Phillip Nova's Priyanka Sachdeva warning that “the damage already done cannot be reversed overnight”.
• BOE Report (Reuters) — the forecasts: Bank of America cut its 2026 Brent average to $82 from $93 if Hormuz fully reopens and expects $70–80 for most of the second half; Goldman Sachs, Morgan Stanley and Citi also lowered theirs.
• Oilprice.com — the war premium gone, with tanker traffic still far from normal.
• MEED — the Gulf business view of a return to below pre-conflict prices.

What we don't know yet: how quickly traffic recovers. Commonwealth Bank of Australia's Vivek Dhar told Reuters that flows need to reach only 60–70% of pre-war levels to restore the pre-war expectation of oversupply.