Donna Dong
Research Analyst, Flux
Brent Drops to $104/bbl
Donald Trump pauses Hormuz mission for Iran talks; conflict lifts Equinor profits; NZ seeks fuel storage abroad.
The Jul’26 Brent futures contract gapped down on open and has been under pressure since, dropping from a morning high of $109.00/bbl at 06:23 BST to $104.10/bbl at 10:10 BST (time of writing).
In the news, US President Trump said last night he was pausing ‘Project Freedom’, the US effort to guide stranded vessels out of the Strait of Hormuz launched on Monday, but added that his blockade of Iranian ports would remain in place. He said the pause would be brief to allow negotiations to conclude, as there has been “great progress” towards a “final agreement” with Tehran. Iranian President Masoud Pezeshkian responded that the US is continuing a policy of “maximum pressure” and expects Iran to accept unilateral demands, something he said is “impossible.” Meanwhile, the United Arab Emirates reported a second consecutive day of missile and drone attacks it attributes to Iran, though Iran’s Islamic Revolutionary Guard Corps denied any involvement. The Middle East conflict has boosted profits for Equinor, which reported $9.77bn in Q1 earnings, its highest since 2023, when the Russian invasion of Ukraine drove a surge in gas prices. The result beat both last year’s $8.65bn and analyst forecasts of $9bn. New Zealand's Resources Minister Shane Jones said the country is considering storing fuel in Malaysia and Singapore because it lacks surplus domestic storage capacity. This vulnerability follows the 2022 closure of the Marsden Point oil refinery, which significantly reduced fuel storage. In response, the government is looking to reactivate storage tanks and has secured an extra nine days of diesel supply. Finally, at the time of writing, the front-month (Jul/Aug) and 6-month (Jul/Jan) Brent futures spreads are at $4.48/bbl and $19.25/bbl, respectively.
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