Newsletter · · Ashutosh Agarwal

Oil Round-Trips Below $70 as Hormuz Reopens - Oil: OPEC+, Shale & Geopolitics - Week of June 24-29, 2026

Three months after the largest physical supply disruption in oil's history, the war premium is gone: WTI round-tripped below $70 as a U.S.-Iran term sheet reopened Hormuz, and the podcast tape split hard between glut bears and snap-back bulls. Our synthesis for the week of June 24-29, 2026.

Oil: OPEC+, Shale & Geopolitics

Week of June 24-29, 2026: Oil Round-Trips Below $70 as Hormuz Reopens

The round-trip is complete, now the fight over what's next

Three months after the largest physical supply disruption in oil's history, the war premium is gone. The August WTI contract that "peaked a little bit above $100 a barrel in the middle of May" was back to roughly $68.50 by Friday, within a dollar of where it sat before the Iran war began at the end of February, per Marc Chandler of Bannockburn Capital on The KE Report. WTI broke below $70 for the first time in nearly four months, printing $69.94, on The Financial Exchange Show. The catalyst: a U.S.-Iran term sheet ("an MOU or whatever it is," as the bears put it) reopening flows through the Strait of Hormuz, a deal already fraying, with projectiles fired at shipping mid-week.

The bigger story is why the doomsday tape never came. On Odd Lots, Commodity Context's Rory Johnston, who'd called for $150 to $200, owned the miss and explained it. Pre-war Hormuz flow was "roughly 20 million barrels a day"; netting all the known reroutes (Saudi East-West, the Emirati line to Fujairah), the market still lost "roughly 13 million barrels a day of Gulf oil production… 13 plus percent of the global supply," "by far the largest supply disruption in the market's history." Yet Brent only "peaked around just a little bit shy of $120" at the end of March and again end-April. The reason it didn't hit $200: China. Chinese crude imports "fell by upwards of 5 million barrels a day," roughly half the total spot-market hit to Asia, letting Korea, Japan, Taiwan and Australia rebuild back to pre-war import levels by June.

From the operators and the money on the line

Separate the people running barrels from the people calling them. On Let's Talk Energy, APA Corporation's exploration chief Tracey Henderson framed the structural bull case from inside the drill bit: the IEA "now see[s] demand to 2050 now for both oil and gas" versus prior 2030 cut-offs, leaving "a gap on how we're going to meet demand, given the declines." APA kept exploring through the downturn while peers cut staff, building Suriname (now moving to development), Alaska and Uruguay, and Henderson is explicit that growth now runs through capital discipline: "not all barrels are created equal." On Hormuz, the operator shrugged: "too much of a major artery globally that that will get resolved," not a reason to skip Gulf acreage.

That capital-discipline read-through dominates U.S. shale. Jay Hatfield of Infrastructure Capital, a board observer at a Permian water-and-oil gathering company who says he talks to producers "all the time," reported "pretty stable production" on The Jay Young Show: producers "haven't really ramped up that much in response to these higher prices." The majors have gone "more of a surplus cash flow, dividends, share repurchases, and stopping growth," so production is "remarkably stable" with few rigs added, and 2027 futures stayed "pretty stable in the 70, 75 range" the whole way through. Note: Hatfield is also a hard bear on spot (more below), but on activity, the insider signal is "no boom."

The money is leaning in on weakness. Olive Resource Capital, on Company Interviews, said the peace deal was largely "priced in," "buy the rumor, sell the news," and are adding to oil and gas names, noting the U.S. had been pulling "3 million barrels a day out of the Strait" and that the SPR "was down to a point where… this had to happen." Doug Casey, long oil via equities and option spreads, told Palisades Gold Radio that $70 "gives everybody in the oil business a businessman's return" against a ~$60 worldwide lifting cost, with Cushing "operating below… operational limits" and reserves needing refilling, he thinks "we're pretty close to the bottom," while warning the Israel-Iran rupture "has not been solved."

The pundits' debate: glut vs. snap-back

The strategist community is split, and hard. The bears see a flood. Hatfield expects sub-$70 "within 30 days" and possibly below $60: with the UAE having left OPEC and the cartel effectively going to maximum output, he models "an extra 4 million barrels of production that didn't exist before the war" against demand of ~100 to 101 mb/d, "we were really oversupplied." Mike McGlone of Bloomberg Intelligence is more aggressive still: a H2 base case "below $55" and "potentially towards $40," contingent on equities rolling over, with OPEC's "redundancy" and "price-maker status shifting to the Western Hemisphere," Iran "can sell crude oil on an open market finally."

The bulls call it a head-fake. Veteran strategist Mike Rothman, four decades in the seat and an OPEC-meeting attendee since 1986, argued on The Loonie Hour that $70 is "disconnected from fundamentals" and inventories justify $98 to $130; what looks like demand destruction is a "financial demand" collapse echoing 2011, since oil is "a perfectly inelastic commodity," and he sees OPEC spare capacity exhausted by late 2026. Jeff Currie, on Energy News Beat, called the sell-off "a temporary dynamic rather than a shift in the broader balances," previously trapped crude pushed through Hormuz isn't a "durable increase," underlying conditions "remain tight," and with the SPR empty and Cushing below minimums he flags "1.2 billion barrels of oil missing from the market" and a rubber-band snap-back risk. Arjun Murti's Super-Spiked splits the difference: IEA forecasts of 4 to 6 mb/d oversupply in 2027 are "ridiculous," the market is "reasonably well ballasted" with long-dated Brent in the "low-to-mid 60s to low-70s," and a backwardated curve averaging ~$14/bbl over five years means equities valued on the long-dated strip are missing real cash.

OPEC is cracking

The cartel's frame is fracturing in real time. On The Smashi Business Show: Iraq has "warned it could suspend or even leave OPEC unless the group raises its oil production quota," with PM Mohamed Shia al-Sudani pledging that 500,000 b/d of Iraqi crude will help refill the U.S. SPR and that "U.S. businesses will receive top priority." With the UAE already out and McGlone calling the group "redundant," everyone wants to sell.

Bottom line

The week's pivot is geopolitical relief, not a balanced market, and the back-half debate now hinges on the same two unknowns: whether tankers actually return (re-entry costs were running 4 to 9x pre-war, adding $5 to $10/bbl versus a normal $1 to $1.50, per The Financial Exchange Show), and whether China keeps drawing stockpiles or starts restocking. Insiders aren't drilling into the rally; the bulls say the tank is empty; the bears say OPEC is uncapped. Watch the ballast-tanker count and Cushing.