NEW YORK (Realist English). Global oil prices moved higher on June 29 amid the resumption of mutual strikes between the US and Iran in the Strait of Hormuz.
The escalation over the weekend, which called into question the fragile truce brokered on June 17, once again heightened market participants’ concerns about supply disruptions from the strategically vital region.
Price Dynamics: From Decline to Rise
During Monday’s trading, the benchmark North Sea Brent crude repeatedly hit fresh highs. At its peak, prices reached $73.61 per barrel, though by around 11:00 Moscow time they had corrected to $72.74.
By 09:29 Moscow time, August Brent futures were at $73.28, up 0.94%. By 18:48 Moscow time, Brent had risen by $1.08 (1.50%) to $73.07.
US West Texas Intermediate (WTI) also moved firmly higher. August WTI futures had risen by $1.38 (1.99%) to $70.61 per barrel by 18:48 Moscow time. Earlier on Friday, WTI futures closed below $70 for the first time since February 27 — the day before the conflict with Iran began.
Over the past week, Brent fell by 10.6% and WTI by 9%, thanks to a rapid increase in fuel supplies through the Strait of Hormuz.
Drivers of Growth: Escalation and Geopolitical Risks
Analysts point to the fresh round of tensions in the Middle East as the main driver of the rally. US and Iranian forces resumed mutual strikes shortly after the signing of the memorandum of understanding.
The current escalation has slowed the transport of energy resources through the Strait of Hormuz, one of the region’s key logistical arteries.
As experts at the international financial group ING noted, “the oil market still faces significant risks.”
In their view, market participants may be overly complacent about the speed of supply recovery: “This complacency is strange and clearly leaves significant upside potential for prices if the supply recovery proves slow.”
Analysts at ANZ also warned: “The market is likely to reassess its assumptions about a rapid recovery in oil supplies from the Gulf.” In their assessment, “physical flows are constrained by tanker congestion, damaged infrastructure and production shutdowns. It may take the rest of the year before supplies approach pre‑war levels.”
At the same time, Middle Eastern producers continue to ship oil and LNG despite fresh attacks on vessels in the strait.
Saudi state oil company Aramco resumed crude loading on Friday at the Ras Tanura terminal west of the Strait of Hormuz after a near four‑month suspension.
Situation on the Russian Market
Russian Urals crude continues to trade at a significant discount to Brent. As of June 29, Urals was in the range of $57–58 per barrel, dipping below the $60 level that is important for the Russian budget.
At the same time, some sources reported Urals rising to $60.11 per barrel.
As analysts note, as long as Russian oil trades around $57–58, it will be difficult for the Russian market to return to sustained growth.
Forecasts: Deficit on the Horizon
Alexander Isakov, Director of the Centre for Macroeconomic Research at Sberbank, told Vedomosti that the main consequence of the Middle East conflict has been a reduction in oil inventories among major market participants.
In his view, oil stocks at the US hub of Cushing have fallen to physical minimums and will take years to rebuild. In addition, China has reduced oil imports by 5 million barrels per day.
According to Isakov, these factors will lead to a deficit in the global oil market in the second half of 2026 and part of 2027, which should allow Brent to remain in the $75–80 range over the next year and a half.
