The agreement between the United States and Iran regarding the opening of the Strait of Hormuz, which is expected to be signed on June 19, 2026, will reformat not only the oil market but also the entire energy geopolitical landscape for the coming years. Donald Trump announced on June 15 the readiness of a 14-point memorandum, and the market reacted immediately: Brent prices momentarily fell to $80 per barrel, causing a record decline in the shares of Russian companies (reaching 2022-2023 lows). This is not just another price fluctuation, but a turning point after which the logic of global energy trading will begin to operate differently.
However, it is premature to rush towards optimism. This is not the first time the participants in this standoff have reached an agreement, so, as the saying goes, we shall see. As of now, 500 vessels remain "moored" in the Strait of Hormuz, and it is unclear who will go where and when. The future of freight rates, which are at risk of collapsing, remains uncertain.
Concerning the deal itself, its parameters seem fairly clear. Iran will de-mine the Strait within 30 days and guarantee unrestricted passage of vessels without tariffs or delays. The United States will gradually lift the maritime blockade. The ceasefire will be extended for 60 days across all fronts, including Lebanon. Concurrently, two months of negotiations regarding Iran's nuclear programme will commence, with the first issue concerning the disposal of highly enriched uranium. The U.S. commits to discussing the easing of sanctions and the unfreezing of Iranian assets, which, according to Axios, total approximately $24 billion.
The unfreezing of assets has been the primary stumbling block in all previous negotiations. Other anticipated points of the memorandum include respect for sovereignty, payments (up to $300 billion) to Iran for post-conflict recovery, the renunciation of nuclear ambitions by the Persians, and the subsequent signing of a final peace agreement.
The market's reaction to yet another "Trump deal" was predictable in shape but not in scale.
If in March 2026 prices rapidly exceeded $100 per barrel due to news factors, now the same mechanism is working in reverse. Prices are not just falling; they are beginning to retreat to levels that suggest a full restoration of shipping. According to forecasts from the U.S. Department of Energy dated June 9, Brent is expected to drop to $79 per barrel by 2027. At the current pace of market movement, this level may be approached sooner than the baseline scenario anticipated.
However, the baseline scenario and the real-world scenario are different things. The International Energy Agency warned in its May report that even with a ceasefire agreement, a supply deficit would be felt until October 2026. The recovery of shipping involves several stages. Initially, de-mining takes the declared 30 days. Then, insurers must restore coverage for tankers passing through the Persian Gulf. Following this, field operators will gradually bring production out of conservation. This does not happen simultaneously. The entire process takes several months. This means that prices below $90 are not an issue for the coming weeks but rather for the second half of the year and into 2027.
The opening of the Strait creates clear winners and losers, and the distribution does not align with traditional views of geopolitics. Global oil consumers, primarily China and India, will benefit from restored supplies from the Persian Gulf and a notable decrease in energy prices. Iran itself will gain the opportunity to restore its exports, which is a crucial condition for the survival of its economy. The unfreezing of assets and gradual easing of sanctions will provide Tehran with the resources needed to restore 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 consulting with cartel members. ADNOC, the UAE's national oil company, plans to boost production capacity to 5 million barrels per day by 2027. This represents an increase of 1.5–1.6 million barrels per day. If the Strait opens and shipping insurance is restored, the Emirates will finally have the genuine opportunity to export these volumes to the global market rather than keeping them in a state of intent.
On the other hand, oil producers outside the Persian Gulf will find themselves at a disadvantage. The opening of the Strait signifies the return of deferred supply to the market. Between February and May 2026, Saudi Arabia, Iraq, Kuwait, and the UAE cut production by more than 11 million barrels per day. These volumes will begin to return to the market. Simultaneously, there may be a softening or outright lifting of the embargo on Iranian oil as part of the package agreement with the U.S. This will create a race for offers in the Middle East, where each producer will attempt to increase sales while prices are still relatively high.
Russian exports find themselves in a vulnerable position. With Brent prices between $95–107, exports operate within a comfortable price zone, providing the budget with substantial additional income above the baseline price of $60 set in the budget rule. A retraction to $79–80 would completely negate these advantages.
It is too early to speak of a full resumption of the transit of oil, petroleum products, and other cargoes through the Strait of Hormuz: we must wait for June 19, when the memorandum between the U.S. and Iran is expected to be signed. If transit is resumed after the documents are signed, Brent prices could drop to less than $70 per barrel in a relatively short time, stated Sergey Teryoshkin, General Director of Open Oil Market.
"Alongside Brent prices, Urals prices will also decline: if in May 2026 the tax price of Russian oil, taking into account spot quotes for Urals and Brent, was $86 per barrel, it could drop below $60 per barrel by summer."
In other respects, not much will change for Russian oil companies: the volume of oil production in Russia in May 2026 was only 300,000 barrels per day lower than in February, whereas Saudi Arabia, Iraq, and Kuwait (the other three largest participants in the OPEC+ deal) reduced their production by a total of more than 9 million barrels per day.
Overall, the oil market will start to return to normal in the second half of 2026.
This will manifest itself, among other things, in increased competition among producers, considering the likely rise in production in the Middle East and potential easing of sanctions against Iran,” says the expert.
OPEC+ already agreed in early June to a further increase in quotas by 188,000 barrels per day for July. This is not an increase but a preparation for retreat. However, Russia's options here are limited. In May 2026, the volume of oil production in Russia was just 300,000 barrels per day lower than in February, while Saudi Arabia, Iraq, and Kuwait have reduced production by more than 9 million barrels per day. This indicates that Russia is already close to its ceiling, while the Saudis have significant room to increase supplies.
Israel has taken a clear stance against the agreement. According to The Guardian and Israeli media, Tel Aviv believes the memorandum does not restrict Tehran's missile programme and effectively consolidates Iran’s gains. Former security adviser to Prime Minister Netanyahu, Yakov Nagel, called the draft agreement "a significant error." This creates a real risk that Israel may attempt to thwart the implementation of the deal through a new incident in the region.
Republican critics of Trump also oppose the agreement, albeit for different reasons. Ahead of the midterm elections, a portion of the Republican Party perceives the memorandum as a concession to Iran. This adds political uncertainty to its implementation. Any major political event in the United States could reshape the power dynamics surrounding the deal.
In practice, the implementation may follow three main scenarios.
The first, baseline scenario: signing on June 19, de-mining completed by mid-July, insurance restored in August. Brent is projected to move towards $85–90 by the end of the third quarter and to $79–82 in 2027. This is the scenario that the U.S. Department of Energy forecasts.
The second, more likely scenario given historical experience with similar agreements: implementation drags. The signing will occur, but de-mining takes longer than the stated 30 days, insurance returns later, and Israeli provocations or internal Iranian disagreements slow the process. Prices may retreat to $90–95 and remain at that level until the end of the year.
The third, worst-case scenario: derailment. The deal is either not signed on June 19, or it is signed but quickly falls apart due to a new incident. Prices rebound above $100, and the market re-enters a state resembling the Hormuz crisis.
The primary factor of uncertainty in the oil market in the second half of the year is the UAE's behaviour outside OPEC+.
The Emirates can increase production as they see fit and at any pace, without coordinating their actions with the rest of the cartel. In this context, they become a primary source of price unpredictability. Russia can control its production within OPEC+, but it cannot control decisions made by Tehran or Abu Dhabi. Therefore, June 19 is not just a date but a turning point for recalibrating all assumptions regarding the energy budget for 2026–2027.
Source: Vgudok
