July WTI crude oil (CLN26) has dropped by $3.76 (4.66%), reaching a 3.25-month low, while July RBOB gasoline (RBN26) is down $0.0653 (2.22%) as of today. The declines follow a sell-off on Monday triggered by an agreement between the U.S. and Iran to reopen the Strait of Hormuz, set to be formalized after a peace deal signing in Switzerland this Friday.
Goldman Sachs has revised its Q4 price forecast for Brent crude to $80 per barrel from $90, anticipating that Persian Gulf crude exports will return to pre-war levels by the end of July. Current data indicates that nearly 600 vessels are stuck in the Persian Gulf awaiting passage through the Strait, which would potentially normalize crude production and refinery operations if insurance becomes accessible post-deal.
Additionally, the Department of Energy has raised its U.S. crude production estimate for 2026 to 13.72 million barrels per day (bpd), while ongoing Ukrainian drone attacks have caused Russian crude-processing rates to hit a 20-year low at 4.32 million bpd, further impacting global oil supply dynamics.
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