LONDON, June 14, 2026, 23:18 (BST)
- Pakistan said the U.S. and Iran agreed to end the war and expect to sign the deal Friday in Switzerland.
- Brent crude traded near $86.60 a barrel on June 14. Traders were betting on the Strait of Hormuz reopening.
- Any price relief could be short-lived. Official forecasts point to global inventories still falling fast after months of Middle East supply disruptions.
Oil is trading higher to start the week after Pakistan said the U.S. and Iran had agreed to end their war and reopen the Strait of Hormuz, the key route that has driven the year’s largest energy shock. Reuters said the deal, which is set for a Friday signing in Switzerland, would lead to the reopening of Hormuz, lift the U.S. naval blockade on Iranian ports, and set up a 60-day window for more talks on Iran’s nuclear program.
President Donald Trump said on social media that the strait will open “toll free,” telling ships to “start your engines. Let the oil flow!” according to Reuters. The Associated Press reported Trump had lifted the U.S. naval blockade, but said details of the deal weren’t yet public and it’s still not clear when all traffic will move through the strait again. Reuters
Brent crude traded at roughly $86.60 a barrel on June 14, down 0.84% for the day and off more than 18% in a month, Trading Economics data showed. That’s a sharp shift from early war fears. Crude is now well below the $100 level many traders expected if the Hormuz disruption dragged on.
Oil prices have stayed under $100 as the market leans on conservation, rerouted flows, and inventory draws. Bloomberg’s Javier Blas, in a June 11 column carried by The Economic Times, pointed to China’s steep drop in imports, weaker demand, new pipeline routes, emergency reserve sales, and nimble refining as key factors. According to Vortexa, China’s tanker crude imports were 6.7 million barrels a day last month, about 40% under its 2025 average.
Cushion is thinning. The International Energy Agency said the war caused the biggest supply hit ever for the global oil market, with over 1 billion barrels lost from the Middle East and more than 14 million barrels a day of oil output shut in while Hormuz tanker flows stayed restricted. The IEA said observed global stocks, including oil at sea, dropped by 250 million barrels across March and April, with its historic emergency release helping.
US Energy Information Administration’s June report spells out why lower fuel prices may take time even if diplomacy advances. The outlook keeps the Strait of Hormuz effectively closed for now, with shipments only starting up again in the third quarter and normal pre-conflict flows not coming back until early 2027. The EIA sees global oil inventories dropping on average by 6.3 million barrels a day in Q2 and 7.6 million a day in Q3. OECD oil stocks could hit lows last seen in 2003.
Analysts say reserve releases won’t steady the market forever. Société Générale’s Mike Haigh told Fortune in a June 10 report that the market “will require higher prices to restore balance.” He pointed to the need for refilling strategic reserves, maintaining inventories, and backing new oil production. Fortune
Execution is the next step. A senior Iranian official told Reuters the draft memo would reopen Hormuz to commercial shipping, drop oil sanctions for a set time, free up $25 billion in Iranian assets and freeze further enrichment while talks continue on a final agreement. Oil buyers now have another worry: not just if Hormuz opens, but if crude, products and stockpiles come back before summer pushes demand and tests what’s left of global buffers.
