The article says the U.S.-Iran understanding on shipping through the Strait of Hormuz is only a framework to negotiate a possible agreement by the end of August, with no substantive breakthrough. It adds that Iran is still seeking leverage over the passage, including “service fees” tied to safe transit. At the same time, global crude inventories outside China have fallen to multidecade lows, leaving little cushion against renewed disruption. Even as many in the market bet on third-quarter volume recovery and Brent sliding to $60 per barrel by year-end, low stocks make prices highly sensitive to any geopolitical reversal.

Citigroup forecasts Brent crude could fall to $60 per barrel by the end of the year as shipping through the Strait of Hormuz returns to normal and the U.S. and Iran are expected to reach a deal in the coming months. It also points to weak Chinese crude imports and a surge in prompt Middle East spot supply that has pressured physical prices. Citi said global inventory draws have been far smaller than expected, signaling a near-term shift toward an oversupplied market structure.

An author argues that the Iran conflict has severely damaged Middle East infrastructure, disrupted shipping through the Strait of Hormuz, and left U.S. strategic reserves nearing depletion, raising the risk of gasoline shortages in July. The piece says that a substantive contraction in global crude supply would deepen a recession and curb demand, pulling oil prices below $40 a barrel, drawing a comparison to the 2020 pandemic shock. It also cites disruptions to Qatar’s LNG exports as an additional strain on energy supply chains.