The agreement between the USA and Iran to open the Strait of Hormuz, expected to be signed on June 19, 2026, will reshape not only the oil market but also the entire energy geopolitical landscape for the coming years. On June 15, Donald Trump announced the readiness of a 14-point memorandum, and the market reacted immediately: Brent crude briefly fell to $80 per barrel, triggering a record decline in the shares of Russian companies (to 2022-23 lows). This is not merely another fluctuation in prices but a turning point after which the logic of global energy trading will begin to operate differently.
However, it may be premature to rush into optimism. Participants in this standoff have negotiated before, so, as the saying goes, we’ll see. There are still approximately 500 ships "idled" in Hormuz, and understanding who will go where and when is quite unclear. The future of freight rates, which risk collapsing, also remains uncertain.
As for the deal itself, its parameters seem fairly clear. Iran will demine the strait within 30 days and guarantee unhindered passage for vessels without tariffs or delays. The USA will gradually lift its maritime blockade. The ceasefire will be extended for 60 days on all fronts, including Lebanon. Concurrently, two months of negotiations will commence regarding Iran's nuclear program, with the first topic being the disposal of highly enriched uranium. The USA commits to discuss the easing of sanctions and the unblocking of frozen Iranian assets, which, according to Axios, amount to around $24 billion.
Indeed, the unfreezing of assets has been the main sticking point in all previous negotiations. Other proposed points in the memorandum include respect for sovereignty, payments (up to $300 billion) to Iran for post-conflict reconstruction, a commitment from the Persians to abandon their nuclear ambitions, and the subsequent signing of a final peace agreement.
The market's reaction to yet another "Trump deal" was predictable in form, but not in scale.
If in March 2026 prices rapidly exceeded $100 per barrel due to news, now the same mechanism is operating in reverse. Prices are not just falling; they are beginning to revert to levels suggesting a full recovery of shipping. According to the US Department of Energy's forecasts from June 9, Brent is expected to drop to $79 per barrel by 2027. Given the current market dynamics, this level may be reached sooner than the baseline scenario indicates.
Nevertheless, the baseline scenario and the real-world scenario are two different things. The International Energy Agency warned in its May report that even with a ceasefire, supply shortages would be felt until October 2026. The process of restoring shipping involves several steps. First, the demining will take the stated 30 days. Then insurers need to restore coverage for tankers passing through the Persian Gulf. After that, field operators will gradually resume production volumes from conservation. This does not happen simultaneously. The entire process takes several months. This means that prices below $90 are not a question of the coming weeks, but rather of the second half of 2026 and into 2027.
The opening of the strait will create clear winners and losers, and this distribution does not align with traditional notions of geopolitics. Global oil consumers, primarily China and India, stand to benefit from an increase in supplies from the Persian Gulf and a noticeable reduction in energy prices. Iran itself will have the opportunity to restore exports, which is a critical condition for the survival of its economy. The unfreezing of assets and a gradual easing of sanctions will provide Tehran with resources to rebuild its damaged oil and gas infrastructure.
Paradoxically, the United Arab Emirates will also emerge as a winner, having left OPEC+ on May 1 precisely to gain the freedom to increase production without coordinating with cartel members. ADNOC, the UAE’s national oil company, plans to increase its capacity to 5 million barrels per day by 2027. This represents an increase of 1.5 to 1.6 million barrels per day. If Hormuz opens and shipping insurance is restored, the Emirates will finally have a real opportunity to export these volumes to the global market instead of keeping them in the realm of intentions.
On the other hand, producers outside the Persian Gulf will be at a disadvantage. The opening of the strait signifies a resurgence of deferred supply in the market. Between February and May 2026, Saudi Arabia, Iraq, Kuwait, and the UAE collectively cut production by more than 11 million barrels per day. These volumes will begin to re-enter the market. Simultaneously, a loosening or complete lifting of the oil embargo on Iran is possible as part of the negotiations with the USA. This will create a competition for offers in the Middle East, with each producer trying to ramp up sales while prices are still relatively high.
Russian exports find themselves in a vulnerable position. With Brent priced between $95 and $107, exports operate within a comfortable price zone, providing the budget with substantial additional revenues over the basic price of $60 included in the budget rule. A drop to $79-80 will fully neutralize these advantages.
It is premature to discuss a full resumption of oil, petroleum products, and other cargo transit through the Strait of Hormuz: we must wait until June 19, when the memorandum between the USA and Iran is to be signed. If transit is resumed after the documents are signed, Brent crude prices could fall to below $70 per barrel in a relatively short time, according to Sergey Tereshkin, CEO of Open Oil Market.
“Along with Brent prices, Urals prices will also decline: if in May 2026 the tax price of Russian oil, considering the spot quotations of Urals and Brent, was $86 per barrel, it could drop below $60 per barrel in the summer.
Beyond that, little will change for Russian oil producers: the volume of oil production in Russia in May 2026 was only 300,000 barrels per day lower than in February, while Saudi Arabia, Iraq, and Kuwait (the other three largest participants in the OPEC+ deal) reduced production by a total of more than 9 million b/d.
Overall, the oil market in the second half of 2026 will begin to return to normal.
This will manifest in heightened competition among producers, considering the likely increase in production in the Middle East and the potential easing of sanctions against Iran,” the expert states.
In early June, OPEC+ agreed to another increase in quotas by 188,000 barrels per day for July. This is not an increase but rather a preparation for withdrawal. However, Russia's options here are limited. In May 2026, the volume of oil production in Russia was only 300,000 barrels per day lower than in February, while Saudi Arabia, Iraq, and Kuwait cut production by more than 9 million barrels per day in total. This indicates that Russia is nearing its ceiling, whereas the Saudis have significant capacity to increase supplies.
Israel has positioned itself in explicit opposition to the agreement. According to The Guardian and Israeli media, Tel Aviv believes the memorandum does not limit Tehran's missile program and effectively cements Iran's gains. Former national security advisor to Prime Minister Netanyahu, Yaakov Nagel, characterized the draft agreement as a “big mistake.” This creates a real risk that Israel may attempt to derail the implementation of the deal through a new regional incident.
Republican critics of Trump also oppose the agreement, albeit for different reasons. Ahead of the midterm elections, some members of the Republican Party view the memorandum as a concession to Iran. This adds an element of domestic political uncertainty to its implementation. Any significant political event in the USA could reshape the balance of power surrounding the deal.
In practice, implementation could unfold according to three main scenarios.
The first, baseline scenario: signing on June 19, demining completed by mid-July, insurance restored by August. Brent moves toward $85–90 by the end of Q3 and $79–82 by 2027. This scenario is in line with forecasts from the US Department of Energy.
The second, more likely scenario given historical experience with similar agreements: implementation stalls. Signing occurs, but demining proceeds slower than the stated 30 days, insurance returns with delays, and Israeli provocations or internal Iranian disagreements hinder the process. Prices retreat to $90–95 and remain there until the end of the year.
The third, worst-case scenario: collapse. The deal is not signed on June 19, or it is signed but quickly collapses due to a new incident. Prices spike above $100, and the market reverts to a state of crisis regarding Hormuz.
The main factor of uncertainty in the oil market in the second half of the year is the behavior of the UAE outside of OPEC+.
The Emirates can increase production in any manner and at any pace without coordinating with the rest of the cartel. In this respect, they become the primary source of price unpredictability. Russia can control its production within OPEC+ but cannot control decisions made in Tehran or Abu Dhabi. This is why June 19 is not just a date but a pivotal moment for recalculating all assumptions related to the energy budget for 2026–2027.
Source: Vgudok
