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US Oil Update: Futures Steady as Markets Await US-Iran Deal Signing

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Crude oil futures were little changed in after-hours trading on Wednesday, as markets awaited the signing of a US-Iran framework agreement that could restore oil flows through the Strait of Hormuz amid mounting concerns about oversupply in 2027.

Front-month West Texas Intermediate crude futures fell 0.5% to $75.65 per barrel, while Brent futures were down 0.3% to $78.70/bbl.

US commercial crude oil inventories decreased by 8.3 million barrels to 418.2 mmbbls in the week ended June 12, the Energy Information Administration said in its weekly report on Wednesday. The EIA said crude inventories are now about 6% below the five-year average for this time of year.

Global inventories remain relatively tight, with US crude stockpiles continuing to decline, said Soojin Kim, research analyst at MUFG, while projecting that Brent would remain in the $80-90/bbl range in the near term.

On Wednesday, President Trump defended the US-Iran framework agreement, saying it could get signed as soon as Thursday. Earlier in the day, Trump had said that a memorandum of understanding with Iran was not final, and that he could resume a bombing campaign if he did not like it or if Iran did not "behave."

"It's a memorandum of understanding. If it doesn't get done in 60 days, that's alright, we go back to bombing," Trump said in a media address at the G7 summit in France. The interim peace deal to end the conflict is set to extend the ceasefire for 60 days and reopen the Hormuz to all commercial vessels.

The draft peace agreement reportedly envisions the rapid reopening of the Strait of Hormuz after a months-long closure that sent global energy prices soaring, and immediate sanctions waivers for Iranian oil.

On the supply side, the International Energy Agency said the oil market will enter a significant supply overhang in 2027, with global supply set to surge by 8 million barrels per day and demand rising by 2 million b/d.

Kpler strategists said that over 90 million barrels of stranded non-Iranian crude and about 70 million barrels of Iranian oil could return to the market as the Hormuz reopens and US restrictions are eased.

The International Energy Agency slashed its outlook for oil demand in 2026, forecasting that global consumption will contract by about 1.1 million b/d, a downgrade of about 700,000 b/d from its previous assessment.

Oil demand in Q2 is projected to be about 5 million b/d lower than the previous year, led by declines of 1.6 million b/d in China and 1.4 million b/d in OECD countries.

The US Federal Reserve held rates steady on Wednesday. Lower interest rates could boost oil demand by reducing borrowing costs for consumers and businesses.

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Oil & Energy

US Oil Update: Crude Falls After US-Iran Peace Deal Signals Supply Boost

Crude oil futures settled lower in after-hours trading on Tuesday, extending losses from the previous session, as investors weighed the prospect of increased Iranian crude exports and a gradual reopening of the Strait of Hormuz following a peace agreement between the US and Iran.Front-month West Texas Intermediate crude futures tumbled 5.1% to $76.62 per barrel, while Brent futures plunged by 4.4% to $79.48/bbl.Soojin Kim, research analyst at MUFG, said optimism about a gradual recovery in Gulf exports has reduced the geopolitical risk premium built up during the conflict.On Tuesday, President Trump said that he's open to sending details of the peace agreement with Iran to members of Congress, according to media reports, as US lawmakers from both parties raise questions, saying they should vote on any final deal.The preliminary deal would extend the US-Iran ceasefire for 60 days and create a framework for future negotiations over Tehran's nuclear program and other issues. Though the agreement's text has not been released, Trump has said he would unveil details on Friday.A senior US official, in an emailed response to, described the deal as "performance-based," noting that Iran can access the agreement's benefits only if it abides by its commitments.The conditions include not pursuing a nuclear weapon, neutralizing its enriched uranium and not interfering with traffic in the Strait of Hormuz, the official said.Though market participants have welcomed the prospect of increased crude flows via the Strait of Hormuz, RBC Capital Markets analysts said the operational challenges of reopening the Strait could take months to resolve.There are about 118 laden tankers trapped in strategic waterways, according to Kpler. However, though the vessels could leave within 10-15 days, Kpler analysts said they could deliver an early spike in transits without boosting regional production.Meanwhile, market participants are still grappling with whether the Strait has been mined, whether Iran retains de facto operational control, and how any transit tolls would be structured and collected.RBC Capital Markets analysts said the core MoU tentpoles remain unchanged from April and center on lifting the double blockade and reopening the Hormuz.On the supply front, the US will reportedly also allow Iran to immediately begin selling oil and fuel under the memorandum of understanding between the two sides, reached to end the conflict.

Oil & Energy

Iranian Oil Tankers Reposition Ahead of Potential Oil Export Resumption, Bloomberg Analysis Says

Iran-linked oil tankers have begun repositioning as Tehran moves closer to an agreement that could quickly reopen access to international oil markets, according to a Bloomberg analysis on Tuesday.Attention in the oil market has shifted to the potential return of Iranian barrels as traders assess the impact of any easing in US restrictions. About 68 million barrels of Iranian crude remain stranded under the blockade, according to a Kpler estimate cited by the analysis.Under a draft agreement nearing completion, Tehran could reportedly receive sanctions waivers that would allow oil exports to resume without delay once the deal is signed.Recent vessel-tracking data indicated that four ships resumed transmitting location signals and appeared to move through the Gulf of Oman and the Strait of Hormuz. Two of the vessels are supertankers with a capacity to transport about 2 million barrels of crude each, according to the analysis.Several tankers that had been anchored near Chabahar also left the area in recent days. The destination of at least three of those vessels could not be immediately determined, the analysis added, citing TankerTrackers.com.Monitoring Iran's tanker fleet remains challenging because vessels often disable tracking systems and are frequently affected by signal interference. Ongoing regional tensions have added another layer of complexity to vessel-tracking efforts, the analysis added.Iranian media reported that efforts to remove the US naval blockade, which has been in place since mid-April, have entered the implementation stage. The Iranian Students' News Agency cited the Deputy Foreign Minister as saying the process is already underway.Shipping restrictions forced a number of Iranian tankers to remain near Chabahar after access to key export routes became limited. Reports said US naval forces also confronted some vessels attempting to move through the blockade in recent weeks.After reactivating their tracking signals, two fuel carriers crossed the Strait of Hormuz, with one continuing through the Gulf of Oman and another indicating a destination near Oman.The analysis said Washington and Tehran are expected to sign an agreement on Friday that would end both Iran's blockade of the Strait of Hormuz and the US blockade of Iranian shipping.

Oil & Energy

Update: Market Chatter: US Intel Assessments Say Iran Gains Ability to Control Strait of Hormuz

(Updated with comments from a senior US official in paragraphs 5-7 and 12, and with the Market Chatter tag in the headline.)US intelligence assessments say Iran currently has the capability to open or close the Strait of Hormuz at will, giving Tehran direct leverage over one of the world's most important energy corridors, CNN reported on Tuesday, citing sources familiar with the findings.US intelligence assessments conclude Iran now possesses a mix of military and asymmetric tools that can significantly disrupt global energy flows through the Strait of Hormuz, giving Tehran leverage far beyond its conventional military weight.Iran's toolkit includes anti-ship missiles, drones, coastal launch systems and naval mines, along with hundreds of fast attack boats capable of swarming commercial vessels and harassing naval escorts.These assets allow Tehran to create enough risk in the waterway to slow or effectively choke traffic without needing full-scale naval dominance.To counter that, a senior White House official toldthat as Iran restores traffic, the US winds down the blockade in proportion.The senior US official said Iran has agreed to a performance-based MOU. "Iran performs, the relief follows, and American leverage holds the entire way," the senior US official toldin an emailed response."They cannot access any benefits of the deal unless the Strait of Hormuz remains open, along with abiding by the other points it agreed to," the official said.The CNN report said US analysts also point to Iran's proven ability to escalate indirectly through strikes on regional energy infrastructure. That expands the threat beyond a single chokepoint to oil production and export facilities across Gulf states, multiplying the potential economic impact.Iran's leverage is reinforced by its proxy network. The assessment notes that Tehran retains the option of activating Houthi forces in Yemen to threaten the Bab-el-Mandeb strait, another critical passage linking the Red Sea and Indian Ocean. If both chokepoints were disrupted simultaneously, global trade flows would face severe stress.Iran had long threatened to close the Strait of Hormuz but had not previously shown it could do so effectively until recent US-led combat operations with Israel. Multiple sources said the Trump administration initially believed Iran would avoid closure because it would damage its own economy more than the US, and expected China to restrain Tehran.As a result, Washington prioritized strikes on Iranian targets over deterring maritime disruption. Days into the conflict, that assumption proved wrong, with officials later assessing Iran acted after interpreting US regime-change rhetoric as an existential threat and escalating deliberately once its intentions were clear.The US is counting on Iran's concern for its economy while negotiations continue. "After Operation Epic Fury dismantled its military and Operation Economic Fury strangled its economy, Iran cannot afford to keep the Strait closed, which helped bring them to the table for a deal in the first place," the senior official told.Axios describes those benefits as broader sanctions relief, access to frozen funds and a potential $300 billion rebuilding investment fund.Despite current diplomatic efforts aimed at reopening maritime traffic, US intelligence officials now believe Iran retains both the capability and the incentive to introduce new disruptions if negotiations break down. Shipping analysts say that even in a "reopened" scenario, risk premiums and uncertainty could keep volumes below normal levels.The intelligence picture also highlights Iran's continued investment in its missile and drone programs and its ability to replenish systems faster than earlier US estimates anticipated.(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)