Following a recent memorandum of understanding between the United States and Iran, shipping traffic through the Strait of Hormuz had begun to gradually resume. However, renewed military friction between the two nations over passage through the strategic waterway has caused international oil prices, which had fallen rapidly back towards pre-conflict levels, to rise once again.
A senior U.S. government official was cited in American media reports on June 28th, stating that the U.S. and Iran have agreed to halt mutual attacks, with negotiations set to continue on June 30th in Doha, Qatar, focusing on the Strait of Hormuz. What lies ahead for global oil prices? What variables are at play? What long-term impacts might the Strait of Hormuz crisis have on the global energy landscape?
Projected Path for Oil Prices
Prior to the outbreak of conflict in the Middle East, the price of Brent crude oil futures in London was approximately $70 per barrel. Following the onset of hostilities, the price surged to around $120 per barrel at one point. After the U.S.-Iran memorandum was reached, international oil prices fell significantly, even dipping below $72.48 per barrel, which was the closing price for Brent crude futures on February 27th, the day before the U.S. and Israel launched attacks against Iran.
Dave Ernsberger, President of S&P Global Commodity Insights, provided analysis in an interview, stating that the recent rapid decline in oil prices is primarily due to a large volume of previously backlogged oil being shipped out in a concentrated manner, creating a short-term "oversupply." He emphasized, however, that this phenomenon is not sustainable, as global oil inventories need to be rebuilt, with a significant portion of new supply going directly into storage, which will curb excessive market declines.
He projects that if U.S.-Iran negotiations progress smoothly and a final agreement is reached, benchmark oil prices like Brent will likely hover around $70 per barrel by the end of this year, potentially staying within the $65 to $70 range next year. The process of rebuilding global oil inventories could continue until the end of this year.
In a mid-June oil market report, Goldman Sachs forecast that overall oil production in the Gulf region would return to normal levels around October of this year. Based on this, Goldman Sachs revised its price forecast for Brent crude in the fourth quarter of 2026 down from $90 to $80 per barrel, and lowered its average price expectation for Brent in 2027 from $80 to $75 per barrel.
Uncertainties in Traffic Recovery
Analysts believe the trajectory of international oil prices is primarily influenced by shipping volumes through the Strait of Hormuz. A report released by S&P Global Commodity Insights on June 25th noted that 78 vessels transited the strait on June 24th, setting a single-day record for traffic since the conflict began. The average daily vessel traffic through the strait this month has recovered to about 57% of pre-conflict levels.
Ernsberger pointed out that traffic through the Strait of Hormuz could potentially recover to 80-90% of normal levels by the end of this year. However, a full recovery remains constrained by two factors: first, Iran continues to issue security warnings and interventions regarding the shipping lanes, causing some vessels to turn back; second, the shipping industry requires six to nine months to readjust to the rhythm of entering and exiting the strait. "Currently, traffic is predominantly exiting the strait; a more normal flow requires more vessels entering as well," he explained.
Ernsberger warned that the current situation remains fragile, and oil prices could jump again at any time if attacks increase. He specifically noted that while the International Maritime Organization's suspension of seafarer evacuation operations in the Strait of Hormuz on June 25th does not directly impact physical oil supply, it still affects international oil prices, reflecting that the market has not yet found a "psychological safety zone." Any minor development could cause price fluctuations.
International shipping data indicates that although recent attack incidents have led to a decrease in vessel traffic through the Strait of Hormuz, commercial ships continue to use this crucial waterway. A June 26th report stated that in the approximately 22 hours following an attack on vessels on June 25th, at least 26 ships with a deadweight tonnage exceeding 10,000 used the southern shipping lane near Oman, while another 11 vessels used the northern lane controlled by Iran.
Ernsberger added that insurance premiums reflecting shipping risk remain high for vessels entering and exiting the Gulf. Premiums will only gradually decrease after a final U.S.-Iran agreement is reached, explicitly guaranteeing safe passage, and following one or two years of observation of normal transit.
Transformation of the Energy Supply Chain
Experts believe the Strait of Hormuz crisis has not only highlighted the longstanding vulnerability of passage through the strait but has also profoundly altered nations' perceptions regarding supply security and the waterway's importance.
Ernsberger analyzed that from the supply side, Saudi Arabia and the United Arab Emirates will significantly expand pipelines to transport more oil around the strait to loading points. Countries like Kuwait, Iraq, and Qatar are also seeking alternative export routes, reducing their sole reliance on the Strait of Hormuz. From the demand side, buyers in India, Southeast Asian nations, and elsewhere have accelerated efforts to diversify their energy sources, increasing investments in renewables, coal, and other alternatives. He pointed out that over the next decade, "oil suppliers will strive to prove their reliability, while buyers will continue to reduce dependence on single channels."
Industry veteran and former Shell executive Simon Henry believes that on the energy demand side, ongoing energy transition trends such as electric vehicles, solar, and wind power may accelerate. Henry and many other industry insiders hold the view that efforts have significantly driven down the global cost of clean energy through scale manufacturing, technological advancement, and supply chain improvements, making renewable energy truly competitive on a global scale.
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