Iranian crude sellers to China have significantly reduced their prices as Iran begins releasing millions of barrels of oil into the market following a provisional peace agreement with the United States. According to individuals directly involved in the transactions, spot cargoes of Iranian Light crude for delivery in July are currently being offered by traders and intermediaries at a discount of $2.50 to $5 per barrel against the Brent benchmark. Prior to the interim deal, the discount was approximately $1 per barrel.
The United States and Iran reached a memorandum of understanding in June 2026. The U.S. announced the agreement on June 14, with formal signing in Switzerland on the 19th. Following an 18-hour negotiation in Bürgenstock, Switzerland on the 21st, mediators Qatar and Pakistan issued a joint statement confirming the pact. This document commits the parties to negotiate and reach a final agreement within 60 days. Market analysis suggests Iran made limited concessions in the deal, with the U.S. leading with significant economic incentives. Foreign media estimates suggest the agreement could yield Iran over $60 billion in annual oil revenues. However, the deal faces multiple uncertainties, including Israel's stated non-compliance, potential opposition from Iranian hardliners, and the inherent unpredictability of the 60-day nuclear talks that follow.
Shipping data indicates that at least 11 tankers, carrying a combined total of roughly 20 million barrels of crude, have recently departed from Iran's Chabahar port. Concurrently, Iran has resumed loading operations at its primary export terminal, Kharg Island. This terminal's operations had been suspended for approximately six weeks due to a U.S. naval blockade, the lifting of which was part of the interim agreement. This surge in supply marks a significant increase from levels seen just weeks ago, when the blockade prevented Iran from shipping crude to market, severely depleting its much-needed fiscal revenue.
According to data from energy analytics firm Kpler, approximately 121 million barrels of Iranian crude remain in storage on tankers in the Persian Gulf and surrounding areas, as well as other locations. This represents a 5% increase from the week before the provisional agreement was reached. About a quarter of this volume is idling near Chinese waters or in the Singapore Strait, awaiting discharge.
Since the late-February conflict triggered by a U.S.-Israeli strike on Iran, transit through the Strait of Hormuz has been impeded. Brent crude prices peaked at around $118 to $120 per barrel, compared to a price just below $70 before the conflict erupted. News of the U.S.-Iran agreement prompted an immediate and sharp decline in Brent prices. The downward trend has continued, with Brent briefly approaching $78 per barrel on June 16. At the time of writing, Brent crude was trading at $78.83 per barrel, down 1.52%.
Goldman Sachs has revised its oil price forecasts downward, now projecting an average Brent price of $80 for late 2026 and $75 for 2027, citing the faster-than-anticipated restoration of crude supply from the Persian Gulf. However, analysts caution that falling oil prices do not equate to an immediate easing of inflationary pressures, noting a typical lag of about three months for upstream energy costs to filter through to downstream sectors and for natural gas prices to adjust.
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