Brent Holds Near $79 as US Drillers Stay Cautious on New Spending
US producers hold back on drilling budgets as the Hormuz war premium drains from crude, leaving ICE Brent front-month little changed near $79.
ICE Brent crude front-month traded at $79.17 on Monday (2026-07-13), up 0.37% on the day. That sits well below its late-May peak, hit during the height of Strait of Hormuz disruption fears, according to livemint reporting from Thursday (2026-05-21).3
The war premium built into crude since the February 28 military action has largely drained away, yet US oil and gas drillers are not rushing to fill the gap.4,7 Ten weeks into the Iran war, nearly 14m barrels a day, about 14% of global output, remained lost behind the closed strait, the Economist reported on 2026-05-17.7
Montel reported that front-month Brent fell around 4% and the ICE Endex TTF front-month lost 8% early on Wednesday (2026-05-20) as hopes of a ceasefire in the US-Israel conflict with Iran eased fears of prolonged supply disruption.1 Oil benchmarks had risen nearly 5% the previous session before giving up the gains in volatile post-settlement trade.1
The EIA's Short-Term Energy Outlook, published Tuesday (2026-05-19), described global oil markets as being in a period of heightened volatility and uncertainty because of the de facto Hormuz closure, a chokepoint that carried nearly 20% of global oil supply before the February action.6,4
US Lower-48 dry gas production is estimated at 109.3 billion cubic feet per day, up 1.4% from a year earlier and near record levels, according to FX Empire on Thursday (2026-05-21).2 That output has come despite cautious rig deployment, not a drilling spree.2
Domestic gas demand reached 73.0 billion cubic feet per day over the same stretch, while seasonal maintenance at export facilities capped LNG feedgas at 17.8 to 18.1 billion cubic feet per day and left surplus supply for the home market.2 NYMEX Henry Hub front-month sat at $2.91 on Monday (2026-07-13), well below levels that would normally prompt bigger drilling budgets. Crude and gas are pointing in different directions on the same volatility, which is why producers on both sides are holding back rather than committing capital.2,7
Crude traded near $84.23 on Friday (2026-06-12), down more than 11% from a monthly peak above $95, exchangerates.org.uk reported, and Westpac forecasts prices easing to an average of $85 in the fourth quarter of 2026.8
One gauge of residual tightness is the diesel crack. Low-sulphur diesel held at a record premium over Dated Brent on Wednesday (2026-05-20), Oilprice.com reported, showing middle-distillate markets stayed strained even as headline crude eased.5
Iran cautioned against further attacks on Thursday (2026-05-21) and announced measures to tighten its control over the Strait of Hormuz.3 Brent had recovered 0.77% that session, a rebound driven as much by a US crude inventory draw as by renewed concern over the chokepoint, livemint reported.3
The next EIA weekly production estimate will show whether that caution is turning into lost barrels.6 If drillers keep waiting for price signals the market has already erased, the supply gap behind Hormuz could outlast the flat screen price.7