Overview

As of June 11, 2026, the global oil market remains in the grip of one of the most severe supply disruptions in modern history, triggered by the US-Iran conflict that erupted on February 28, 2026. The closure of the Strait of Hormuz—a chokepoint that normally handles approximately one-fifth of global oil and LNG supply—has removed over 14 million barrels per day (mb/d) of production from global markets, caused cumulative supply losses exceeding one billion barrels, and driven Brent crude to an April peak of $138/bbl. Since early May 2026, a sequence of diplomatic signals, culminating in reports of a draft memorandum of understanding (MOU) mediated by Pakistan and Qatar, has generated episodic price relief and renewed hopes for a reopening of the waterway. However, as of this writing, the political path to a durable de-escalation remains uncertain, and market participants are confronting a high-stakes scenario in which inventories are approaching multi-decade lows, demand destruction is already underway, and the timeline for normalization may extend well into 2027 [9][12].

This report analyzes three interconnected dimensions of this crisis: (1) the market reaction to the latest round of diplomatic statements, (2) the prospects for sustained de-escalation and its implications for Strait of Hormuz shipping security, and (3) the implications for global crude benchmarks and US gasoline prices. It draws primarily on sources from May and June 2026, with older sources used only to establish baselines or when they contain uniquely relevant data. Where sources conflict, this report privileges more recent information when credibility is comparable and explains any exceptions.

Market Reaction to Recent US-Iran Deal Statements

Chronology of Diplomatic Developments and Corresponding Price Movements

The period from mid-May to early June 2026 witnessed a dramatic oscillation in oil prices, driven by a sequence of often contradictory signals from Washington, Tehran, and mediating capitals. Understanding this volatility requires a close chronological reading of events, as prices have frequently reversed within hours of new headlines.

Pre-crisis baseline and peak. Before the war, Brent crude traded around $70/bbl [14]. The conflict drove Brent to an April peak of approximately $138/bbl, with an average of $117/bbl for the month, and the North Sea Dated benchmark experienced an unprecedented trading range of almost $50/bbl in April, averaging $120.36/bbl. These extremes reflected a market pricing a near-total loss of supply from the Gulf region, with OPEC+ production collapsing from 42.77 mb/d in February to 33.19 mb/d in April [12].

Mid-May 2026: Ceasefire hopes and skepticism. By May 14, Brent had receded to $107.43/bbl as the market absorbed the initial ceasefire of mid-April and anticipated diplomatic talks. On May 17, when President Trump expressed frustration with Iran's negotiating posture, warning that "the clock is ticking," Brent was at $109.26/bbl, still roughly 50% above pre-war levels [5]. On May 20, an Arab media report (Al Hadath) that a US-Iran deal could be close sent US crude sharply below $100 to approximately $98.55, while the S&P 500 rallied 0.9%, with travel stocks like Delta Air Lines surging 8.4%. However, the market proved skeptical of a near-term breakthrough: on May 21, Brent recovered to $104.80 (up 2.13%) and WTI to $97.99 (up 1.70%) as traders reassessed the probability of an imminent agreement.

May 21–25: Draft agreement rumors trigger sharp selloff. On May 22, the ILNA news agency reported that a draft agreement had been reached through Pakistani mediation. Markets reacted immediately: stocks rose, oil prices fell, and US dollar and Treasury yields slid on improved risk sentiment. Over the May 25 weekend, this optimism intensified. Brent crude futures dropped 6% to $97.43—the lowest in two weeks—on hopes for a peace deal. Stock markets rallied globally (Japan's Nikkei +3%, Europe's Stoxx 600 +1%). Two LNG tankers and a stranded supertanker carrying Iraqi crude were observed exiting the strait [15]. However, an Iranian spokesperson cautioned that a deal was "not imminent," and the price action signaled that the market was pricing in a significant probability of a diplomatic resolution while remaining wary of collapse [15].

May 25–26: US military strikes re-escalate tensions. The hope-driven selloff reversed abruptly on May 25–26, when the US military conducted strikes on Iranian boats and missile launch sites in southern Iran. Brent crude rose 2.5% to $98.50, while WTI fell over 6% to around $90.73/bbl—the divergence reflecting the Memorial Day holiday in the US. On May 26, Brent climbed another 1.5% to $97.56/barrel in early Asian trade, then later increased by $2.43 (2.5%) to $98.57/bbl, while WTI fell 4.5% from Friday's close to $92.24 [14][16]. This pattern—sharp declines on diplomatic optimism followed by equally sharp recoveries on military escalation—became the defining characteristic of the market in late May.

May 27–29: Deal terms leak, market prices in partial normalization. On May 27, news that a draft MOU had been reached, including Iran's commitment to restore Strait traffic within one month, triggered a sharp selloff. WTI dropped 4.32% to $89.83/bbl, and Brent fell 3.66% to $95.94, staying below $100 for a third consecutive day. The detailed terms emerging from diplomatic sources suggested a 60-day MOU in which Iran would clear mines from the strait, allow free shipping, and commit to negotiating over its enriched uranium stockpile, while the US would lift its naval blockade and issue sanctions waivers for Iran to sell oil [6][9]. On May 29, Brent closed the month at $92.56, down 1.2% on the final trading day and nearly 19% for the month—its worst monthly performance since the COVID-19 pandemic [12].

June 4–7: Talks stall, prices stabilize. By June 4, Iran's foreign minister Abbas Araghchi posted that "no tangible progress" had been made, sending Brent easing nearly 1% to around $97/bbl. On June 7, Brent settled at $93.09/bbl and WTI at $90.54/bbl, as traders grew more confident about a potential peace deal following reports of intensified Pakistani mediation efforts. However, the same day saw Iran and Israel exchange strikes—the first direct attacks since the April ceasefire—underscoring the fragility of any diplomatic progress [12].

June 9–11: Renewed escalation and eleventh-hour reversal. On June 9, Iranian Shahed drones downed a US Apache helicopter near the Strait of Hormuz, prompting US retaliatory strikes. Front-month WTI rose 1.1% to $89.17/bbl on escalating supply disruption concerns [13]. On June 10, a report that a US-Iran deal could be close sent US crude lower again, but the most dramatic move came on June 11. President Trump called off a threat to bomb Iran after being "an hour away" from ordering fresh attacks [2]. The S&P 500 jumped 1.8% in its best day in two months, and Brent crude fell to approximately $92/bbl. Stock index futures rose in pre-market trading, with Dow futures up 0.68% and S&P 500 futures gaining 0.76%.

Pattern of Pricing Behavior and Trader Sentiment

Several structural observations emerge from this chronology. First, the market has become hypersensitive to diplomatic headlines, reacting to any signal suggesting a reopening of the Strait with rapid and sometimes violent price declines. Second, each successive selloff has been shallower than the previous one, suggesting that traders are increasingly skeptical that a deal will be consummated. As Michael Every, global strategist at Rabobank, characterized the cycle: "It just seems to be this endless loop of Charlie Brown and Lucy with the football. Every single time, it's 'oh, this time is the breakthrough.' And at any one given time, it could be right. But so far, repeatedly, it hasn't been" [11].

This skepticism is reflected in options and volatility markets. UBS analysts warned that oil markets could become more volatile with the risk of "panic buying if physical dislocation intensifies and the Strait of Hormuz remains closed". UBS's "Turbu-lens" machine-learning framework had risen to 0.8 on a scale where 1 signals highest potential for market stress. HSBC noted that market calm appeared to reflect "market complacency to some degree," predicting that the consequence would be "accelerated storage injections during the back end of the summer months and with it heightened price volatility" [11].

The IEA identified a "perception gap" between physical and financial markets [2]. While futures prices have fallen on diplomatic optimism, the physical market remains extremely tight. US crude inventories fell by a record 17.8 million barrels in one week in early June. Global observed inventories drew by 250 million barrels over March and April combined. As the IEA's Executive Director Fatih Birol warned, oil markets "may be entering the red zone in July or August" due to depleting stockpiles and rising summer travel demand.

Trading volumes and positioning data confirm the dominant narrative. Hedge funds and trend-following CTA funds maintained a broadly bullish stance on crude oil through April, with the SG CTA Index up 11.9% year-to-date by June 2, driven largely by long energy positions [13]. However, the options market was flashing warning signals: demand for downside protection was anemic, with 25% of S&P 100 stocks showing inverted call skew (excessive bullishness), and stock correlation had sunk to near-record lows, masking underlying fragility. This pattern suggests that the market is under-hedged for a potential downside shock if a deal materializes, but equally vulnerable to a violent upward spike if talks collapse completely.

Likelihood of Sustained De-Escalation and Effects on Strait of Hormuz Shipping

Status of Negotiations and Key Obstacles

As of June 11, 2026, the diplomatic situation is in an ambiguous state. Multiple sources confirm that the US and Iran have agreed on the text of a 60-day memorandum of understanding, to be called the Islamabad Agreement, mediated jointly by Qatar and Pakistan [9]. The draft MOU would: immediately reopen the Strait of Hormuz without tolls; lift the US naval blockade; provide Iran with sanctions relief tied to compliance; extend a 60-day ceasefire (including in Lebanon); and establish a framework for nuclear negotiations [9]. A mediating diplomat and a US official both confirmed the deal was tentatively reached on the night of June 10, 2026, after hours of negotiations in Tehran [9].

However, the deal still requires final approval from President Trump and, critically, from Iran's Supreme Leader Ayatollah Mojtaba Khamenei, which has not been forthcoming [9]. Iran's foreign ministry spokesman Esmaeil Baghaei stated that while understandings have been reached on many issues, "no one can make such a claim" that signing is imminent [3]. The situation is further complicated by Vice President JD Vance's statement on June 9 that Trump is "locked and loaded" to restart military operations if talks fail [2].

Several structural obstacles make a durable de-escalation uncertain:

1. Nuclear program sequencing. A central sticking point remains the order of concessions. Iran insists that nuclear issues be addressed only after sanctions relief is provided, while the US demands upfront commitments on enriched uranium. The New York Times reported on May 23 that Iran had agreed in principle to give up its stockpile of highly enriched uranium, but precise mechanisms for surrendering the stockpile were deferred to later talks [17]. One option being considered is down-blending Iran's HEU inside the country under IAEA supervision, but this would require a level of access and verification that Iran has historically resisted [9].

2. Iranian internal divisions. The Institute for the Study of War (ISW) and Critical Threats Project (CTP) report that IRGC Commander Major General Ahmad Vahidi is dominating policy and opposing nuclear discussions, while negotiators like Parliament Speaker Ghalibaf face criticism for showing willingness to concede [6]. Supreme Leader Khamenei's recent public statements indicate he is not willing to give up Iranian control over the Strait of Hormuz. The ISW/CTP assesses that even if Iranian negotiators offered some concessions, it is far from clear that senior decision-makers in Tehran are willing to make such concessions [4].

3. Control over the Strait. Iran has formalized its demand to exercise operational control over the Strait of Hormuz, launching the "Persian Gulf Strait Authority" (PGSA) to vet transits and impose fees. The US Treasury sanctioned the PGSA on May 27 and warned of secondary sanctions against entities cooperating with it [4]. Eurasia Group analyst Gregory Brew described this as Iran's "new nuclear option"—the demonstrated ability to close the strait and keep it closed, which "no one will ever be able to take away from them". Former Biden advisor Amos Hochstein stated: "No matter what happens, the Iranians will control the Strait of Hormuz for the foreseeable future" [9].

4. Israeli and domestic US political constraints. Israeli Prime Minister Netanyahu has expressed concern about the emerging deal, especially regarding conditions related to Hezbollah [6]. The US faces domestic political constraints: Trump has explicitly rejected anything resembling the JCPOA, and hardliners like Mike Pompeo, Ted Cruz, and Lindsey Graham have criticized the proposed deal. As the US midterm elections approach, the White House faces pressure to stabilize oil markets, but military escalation also carries political risks.

5. Iranian military reconstitution. Iran is using the ceasefire period to rebuild its drone and missile programs. The ISW/CTP reports that satellite imagery between April 5 and May 22 reveals Iranian efforts to reopen tunnel entrances at the Yazd Missile Base, clear rubble, build new roadways, and replace missiles and launchers. Iran still has 50% of its pre-war drone capabilities (thousands of drones) and roughly two-thirds of its missile launchers [4][6]. This reconstitution undermines the strategic rationale for a cease-fire from the US perspective, as it allows Iran to rebuild the very capabilities used to close the Strait.

Prediction Market Probability

The Kalshi prediction market, as of June 8, 2026, projected a 66% chance that normal shipping traffic through the Strait of Hormuz would not resume before January 2027. The odds of returning to normal before August 2026 plummeted from 66% to 21% in the two weeks prior, following renewed hostilities between Iran and Israel on June 7. Kalshi defines "normal traffic" as a seven-day moving average of more than 60 ships passing through the Strait [12]. This prediction market data, while not infallible, represents a market-based assessment of the probability distribution, and it skews heavily toward continued disruption through the end of 2026 and into 2027.

Strait of Hormuz Shipping Dynamics

Current traffic levels. Pre-war transit through the Strait of Hormuz was approximately 135 ships daily, handling about 20% of global oil and LNG supply. By mid-2026, traffic had collapsed. During one 24-hour period in late May, only six crossings were recorded [8]. Iran's IRGC Navy claimed 35 vessels transited after obtaining Iranian "permission" and "security," but for all practical purposes, the Strait has been closed to non-Iranian shipping for the duration of the conflict [1].

However, as of June 10, 2026, there are signs of a clandestine reopening. Bloomberg reported a surge in covert oil shipments, with 16 tankers gathering off the coast of Oman over the weekend of June 6–7 to transfer millions of barrels of oil that had been stranded in the Persian Gulf. Vessels are increasingly turning off their transponders to evade detection, and flows are now estimated at about 2 mb/d—far below normal but much higher than earlier in the conflict. US Energy Secretary Chris Wright stated on June 9 that ship traffic and oil exports through the Strait are "rising very meaningfully" [11]. Nearly 900 outbound tankers crossed the Strait between March 1 and May 19, with at least 358 employing methods to "go dark" by switching off AIS. The share of vessels going dark rose from 37% in the first month of the war to 65% in May, according to Vortexa.

Tanker rates and insurance costs. The closure has driven a fundamental restructuring of global tanker trade. Dirty tanker exports from the Americas reached a record 14.5 mb/d in May, up 40% year-on-year from May 2025, driven primarily by US exports [8]. The US became the world's largest oil exporter for the third consecutive month in May, surpassing Saudi Arabia and Russia, with exports of about 10.5 mb/d [10]. War risk insurance premiums for the Strait of Hormuz have spiked dramatically. Oscar Seikaly, CEO of NSI Insurance Group, stated that the market will "remember that the Strait of Hormuz can be disrupted very, very quickly," and insurance premiums are expected to remain elevated long after any reopening. The Lloyd's Market Association reported that the real issue is crew and vessel safety, not a lack of insurance; Indian Captain Raman Kapoor said his crew is unwilling to risk transit even under a military escort.

Post-deal shipping scenario. If a deal is reached and the Strait reopens, CNBC has reported that oil exports through the waterway may not return to pre-war levels. The article, citing Helima Croft of RBC Capital Markets, argues that "any end to the conflict that leaves Iran exercising operational control and influence over the Strait will result in appreciably lower flows through the waterway in our view" [9]. Lloyd's List's Richard Meade described the likely outcome as "a permanently bifurcated strait where access is a function of political alignment, not freedom of navigation" [9]. Rystad Energy's Jorge Leon said: "We are talking a geopolitical risk premium of $10–20 per barrel. We are convinced that Iran will maintain some sort of leverage over the Strait of Hormuz going forward. We're not going back to oil prices at $60 a barrel, not even in 2027".

What happens if talks collapse. The possibility of a diplomatic collapse carries existential risks for the global economy. Wood Mackenzie modeled three scenarios: a quick peace (Strait reopens by June 2026) would see Brent ease to ~$80/bbl by end-2026; a summer settlement (reopens by September 2026) would trigger a shallow global recession; and an extended disruption (closed through end of 2026) could drive Brent toward $200/bbl, trigger a 6 mb/d drop in global oil demand, and cause the third global recession this century, with Middle East GDP falling 10.7% and US GDP growth falling below 1%. Rapidan Energy Group warned that closure through August 2026 raises the risk of a recession rivaling the 2008 Great Recession.

Implications for Global Crude Benchmarks and US Gasoline Prices

Current Crude Oil Price Levels and Forward Curve

As of June 11, 2026, Brent crude is trading around $92/bbl, while WTI is in the high-$80s/low-$90s range—roughly 30–35% above pre-war levels but well below the April peak of $138/bbl. The forward curve is in a state of extreme backwardation, reflecting acute near-term supply scarcity that markets expect to normalize only gradually. The IEA's base-case forecast assumes a gradual resumption of traffic through the Strait from Q3 2026 onward, but even under that scenario, global supply is projected to decline by 3.9 mb/d on average in 2026.

Price Forecasts Under Different Scenarios

Scenario 1: Full diplomatic resolution with Strait reopening by June/July 2026. Under this scenario, Iranian exports could return to 1.0–1.5 mb/d within 3–6 months, approaching JCPOA-era peaks of 2.5 mb/d. Brent would likely decline to the $70–80/bbl range by late 2026, as the fear premium dissipates and supply returns. Goldman Sachs has a Q4 2026 Brent forecast of $90/bbl, but with two-sided risks [18]. The EIA forecasts Brent averaging around $105/bbl in June and July (spot market) before settling lower. However, even under this optimistic scenario, the EIA warns that "because of the size of the drawdown in global inventories, we forecast that oil prices will remain elevated until global oil flows return to normal levels and oil inventories are replenished". Enverus Intelligence Research projects that OECD crude and product inventories will fall from 2.82 billion barrels at end-2025 to approximately 2.36 billion barrels by Q4 2026—a 20-year low—and that Brent will remain above $100/bbl through Q3 2027 regardless of the diplomatic outcome.

Scenario 2: Prolonged negotiation with partial de-escalation (base case). This scenario is consistent with the IEA's base case and the Kalshi prediction of at least 66% probability of continued disruption through January 2027. Under this scenario, Iranian exports remain near zero through mid-2026, the Strait reopens only partially (with continued Iran operational influence), and a geopolitical risk premium of $10–20/bbl becomes embedded. Enverus projects Brent averaging ~$110/bbl in H2 2026 and peaking near $117/bbl in Q4 2026, with each additional month of disruption adding $10–15/bbl. Piper Sandler forecasts Brent at $130/bbl in July and August [1]. The market would remain in deficit throughout 2026, with the IEA projecting supply falling short of demand by 1.78 mb/d for the year.

Scenario 3: Breakdown of talks and renewed military conflict. This tail-risk scenario would take Brent toward $200/bbl, as modeled by Wood Mackenzie. The IEA warned that oil markets "may be entering the red zone in July or August" due to critically depleted inventories and rising summer demand. ExxonMobil senior vice president Neil Chapman warned that physical prices for Brent could reach $150–160/bbl. ICIS reported that the chief strategist at UBS warned that stocks of crude oil and refined products are approaching all-time lows reached in 1990, and that "the next 45–60 days will be critical".

OPEC+ Dynamics and Spare Capacity

The ability of OPEC+ to compensate for the supply disruption is severely constrained by geography. Although Saudi Arabia has a pre-war capacity of about 12 mb/d and the UAE 4.3 mb/d, much of this capacity is inaccessible due to the Hormuz blockade. Saudi Arabia has rerouted flow through its East-West Pipeline to the Red Sea at Yanbu, carrying about 4.5 mb/d [1][4]. The UAE is accelerating construction of a pipeline to Fujairah to double export capacity bypassing Hormuz by 2027, but this provides no relief in the near term [10][18].

The seven core OPEC+ members (Saudi Arabia, Iraq, Kuwait, Algeria, Kazakhstan, Russia, Oman) have been approving monthly quota increases of about 188,000 bpd, but actual production has collapsed because Gulf members cannot physically deliver. The shortfall vs. implied targets was 9.25 mb/d in April. The UAE's departure from OPEC on May 1 has further complicated coordination, with analysts noting that "given political tensions between Saudi Arabia and the Emirates, the likelihood that the Saudis would unilaterally cut production to support the price, as they have sometimes done in the past, seems small" [6].

US Gasoline Prices

Current levels. The US national average gasoline price stood at approximately $4.16–4.24 per gallon in early June 2026, down from a post-crisis peak of $4.55/gallon in late May but still well above the $3.12/gallon when President Biden left office in January 2025 [6][7]. Gasoline prices have surged more than 50% since the start of the war. The $4.16/gallon average on June 8–9 was higher than on 91% of the days of the Biden administration [6].

Inventory dynamics. US gasoline inventories are falling at a record pace. From early February to late May 2026, inventories fell by 47.5 million barrels—the largest February-to-May decline in weekly EIA data going back to 1990 [10]. For the week ending May 22, gasoline stocks stood at 211.6 million barrels—below the five-year average and the lowest May level since 2014 [10]. This occurred despite strong refinery runs at 94.5% utilization and 17 mb/d inputs, driven by elevated US petroleum product exports amid global market stress [10].

Summer driving season outlook. GasBuddy forecasts that this could be the most expensive summer at the pump in years. If the Strait remains closed for most of the summer, prices could hit $5/gallon or higher and potentially set new all-time records [7]. Piper Sandler forecasts that Brent at $130/bbl in July and August would push US gas prices above $5/gallon [1][4]. A GasBuddy survey found that 67% of Americans say gas prices directly impact their driving plans, and 36% are taking fewer road trips. AAA estimated a record 45 million Americans would travel for Memorial Day despite high fuel costs.

Relationship between crude and pump prices. The transmission mechanism from crude to retail gasoline is well-established: a $10/bbl drop in crude typically translates to approximately 24–28 cents per gallon at the pump, though this varies with refining margins and distribution costs. Goldman Sachs' Q4 2026 Brent forecast of $90/bbl and WTI of $83/bbl would imply potential retail gasoline in the $3.50–3.80/gallon range if realized, assuming normal refining margins [18]. However, the EIA forecasts retail gasoline to average $3.88/gallon in 2026 and $3.62/gallon in 2027. Even under a relatively optimistic scenario, prices below $3/gallon are unlikely for many months, possibly over a year [7].

Refining and fuel crisis risk. Analysts warn that if the Strait does not reopen by mid-June, the crisis could evolve from a crude shortage into a "refining and end-user fuel crisis." JP Morgan stated: "The next phase of this shock may look less like a traditional crude spike and more like a refining and end-user fuel crisis" [5]. Global refinery crude throughputs are forecast to plunge by 4.5 mb/d in Q2 2026 and 1.6 mb/d for 2026 overall, as operators face infrastructure damage and feedstock constraints. The petrochemical and aviation sectors are most acutely affected.

IEA, EIA, and Analyst Supply-Demand Balances

The convergence of forecasts from the IEA, EIA, OPEC, and private-sector analysts paints a picture of a market that will remain structurally tight through at least late 2027 under all but the most optimistic scenarios:

• IEA (May 2026 OMR): World oil demand is forecast to contract by 420 kb/d year-on-year in 2026, to 104 mb/d, 1.3 mb/d less than the pre-war forecast. Global supply is projected to decline by 3.9 mb/d on average to 102.2 mb/d. The resulting supply-demand deficit is 1.78 mb/d in 2026, a dramatic reversal from the 410 kb/d surplus projected in April and a nearly 4 mb/d surplus in December 2025.

• EIA (May 2026 STEO): OECD inventories are projected to fall to just under 2.3 billion barrels by December, the lowest since at least 2003, assuming Hormuz traffic does not return to pre-conflict levels until early 2027. Global oil demand is expected to shrink by 1.1 mb/d in 2026—the first decline since the 2020 pandemic—reversing an earlier forecast of a 200 kb/d increase.

• OPEC (June 2026): Lowered its 2026 global oil demand growth forecast to 970 kb/d (down from 1.17 mb/d), marking the second consecutive downward revision. Raised 2027 demand growth to 1.73 mb/d.

• Enverus Intelligence Research (June 11, 2026): Brent will average ~$110/bbl in H2 2026, peak near $117/bbl in Q4 2026, and remain above $100/bbl until Q3 2027. A lasting geopolitical risk premium of $5–10/bbl will be embedded. Each additional month of disruption adds roughly $10–15/bbl to average Brent during H2 2026. OECD stocks will fall to approximately 2.36 billion barrels by Q4 2026—a 20-year low.

• IEA Executive Director Fatih Birol (May 18): Warned that commercial oil inventories are depleting rapidly with only "several weeks" worth left. Strategic reserve releases (400 million barrels in March, the largest such action in IEA history) have added 2.5 mb/d to supply but "are not endless".

Potential Price Paths for Brent, WTI, and US Gasoline

Synthesizing the scenario analysis, supply-demand balances, and expert forecasting, the following price paths emerge:

Near-term (June–August 2026): Under the current base case—ongoing negotiations with periodic escalation and de-escalation, partial reopening of the Strait through covert tanker activity, and continued inventory draws—Brent is likely to trade in the $90–110/bbl range. If talks collapse entirely and military conflict resumes, Brent could spike to $130–160/bbl and US gasoline to $5/gallon or higher. If a deal is signed and implemented, Brent could drop to $80–90/bbl and gasoline to $3.80–4.20/gallon.

Medium-term (September–December 2026): The forward curve, Enverus modeling, and IEA projections suggest that even under a diplomatic resolution, the "stock hole" will keep prices elevated. Brent is likely to remain in the $85–110/bbl range, with the EIA projecting an average near $105/bbl in H2 2026. US gasoline would likely remain in the $3.60–4.20/gallon range. In a no-deal scenario, prices would be significantly higher, potentially approaching the $150–200/bbl that Wood Mackenzie models under extended disruption, with gasoline exceeding $5/gallon.

Long-term (2027): The EIA forecasts retail gasoline to average $3.62/gallon in 2027 and assumes Hormuz traffic will not return to pre-conflict levels until early 2027. Enverus projects Brent above $100/bbl through Q3 2027, with a lasting geopolitical risk premium. However, structural factors—including the UAE's pipeline bypass capacity (doubling by 2027), continued growth in US exports, and the likely return of 1.0–1.5 mb/d of Iranian supply under any deal—point to gradual normalization over time.