Oil prices rise as US, Iranian strikes threaten Strait of Hormuz reopening

Term structure and the unwind that didn't hold

Curve flattened across the second half of June as the market priced the June 17 MoU between Trump and Pezeshkian as a clean resolution. Front-month re-bid Monday against less-affected deferred contracts — backwardation re-steepening on renewed flow risk through Hormuz.

Fabien Yip at IG framed the move as "a market that had perhaps run too quickly on ceasefire optimism. Oil had nearly unwound its entire war premium, despite an MoU with no enforcement details and ongoing strikes." Thursday's commercial vessel attack had already forced a partial re-price; weekend exchanges compounded it.

Spread monitor: front-month vs deferred. Steepening means traders are pricing flow disruption; flattening reads the weekend as noise.

Supply stack — bearish overlay already loaded

Financial Post reported Brent near $70/bbl by week's end, the entire wartime premium erased — roughly $3.21 below Monday's intraday spike.

Stack composition since the mid-June MoU:

• 60M+ barrels of Persian Gulf storage cleared into the market
• Saudi Arabia and UAE exports at or near pre-war levels, supported by US naval escort and bypass pipeline routes
• Iranian crude re-entering trade under US sanctions waivers
• US Gulf Coast weekly releases from the 400M-barrel SPR drawdown continuing

China remains on the sidelines. Morgan Stanley and Goldman flagged 2026 glut risk this week. Kitt Haines at Energy Aspects: "The overwhelming feeling is bearish."

Doha binary

Axios reported talks in Doha Tuesday. Iran has yet to comment on ceasefire.

Levels: $70 psychological floor, $73.21 spot, $80 resistance. Spread steepening through $73 = escalation priced. Flattening through $70 = supply overhang wins the tape.