As Peace Talks Resume, Oil Holds Well Below the Forecasts Written During the Crisis
WTI settled near $71 on Monday as diplomacy resumed, but crude has shed nearly 40% from March's war-driven high.
Oil rose on Monday (2026-06-29) as traders positioned for the resumption of US-Iran peace talks following a weekend of flare-ups over the Strait of Hormuz that served as a reminder of the ceasefire's fragility.6 West Texas Intermediate crude front-month added 2.2% to settle at $70.75 a barrel. ICE Brent September futures gained 1.8% to $73.91. The moves were orderly, not explosive.
The scale of repricing since the conflict's peak puts Monday's (2026-06-29) bounce in context. ICE Brent crude topped at roughly $120 a barrel in March 2026 as the war-driven supply shock pushed prices to multi-year highs, according to Trading Economics data.2 ICE Brent September futures settled at $73.91 on Monday (2026-06-29), nearly 40% below that high and well under the levels at which most analyst forecasts were drafted in May.
The gap between the tape and consensus estimates is now significant. Goldman Sachs raised its Q4 2026 oil price forecast to $90 a barrel for Brent and $83 for WTI, citing reduced Middle East output. The revision was made when prices were trading between $92 and $99 in mid-May 2026.4 ICE Brent September futures at $73.91 sit materially below that Q4 target, implying either a fresh supply shock lies ahead or the May revisions have already been overtaken by events.
Physical signals suggest the supply picture is normalizing faster than the diplomatic timeline. A very large crude carrier loaded approximately 2 million barrels of oil in Qatar and was last tracked off Fujairah, a UAE port in the Gulf of Oman, on Monday (2026-06-29).6 A tanker of that scale transiting the Gulf before any formal agreement is signed suggests the Strait of Hormuz risk premium was already eroding on the supply side. Analysts put that premium at $4 to $10 a barrel in May 2026, according to OilPrice.com; it appears considerably smaller now.3
The SPR picture adds an asymmetric risk. The US Energy Information Administration reported that American crude inventories drew nearly 10 million barrels from its Strategic Petroleum Reserve in a single week during the peak of the disruption, the largest weekly withdrawal on record, according to EIA data from the week of 2026-05-11.1 The SPR now stands 6.6% below the year-earlier level.2 A second closure of the Strait of Hormuz would find Washington with measurably less buffer than it had during the first.
The Persian Gulf typically supplies roughly 20 million barrels per day to global markets. Even a temporary disruption at that scale commands a sustained premium. The weekend flare-up that preceded Monday's (2026-06-29) rally was a reminder the ceasefire is conditional. Talks were adjourned on Thursday (2026-05-14) before resuming the following week, and the start-stop pattern has continued since.5,2
The IEA noted in mid-May 2026 that strategic reserve releases were adding 2.5 million barrels per day to the market during the peak of the crisis, according to IEA Director Fatih Birol.5 That intervention is winding down. If Iranian export volumes normalize further and SPR drawdowns slow, the physical market may find itself better supplied than Goldman's Q4 forecast assumes.
ICE Brent September futures settled at $73.91 on Monday (2026-06-29), below Goldman Sachs's Q4 Brent call of $90 a barrel made when the crisis was at its most acute in May. Fresh data on Hormuz transit volumes and the pace of Iranian export recovery will determine whether that gap closes or widens through the summer. A sustained close above $75 would indicate residual risk premium remains in play; a drift toward $69 would confirm the May revisions are the forecasts that now need updating.4,6