Martha Dowding
Research Associate, Flux
Brent Under Pressure
US-Iran deal nears, US crude inventories fall, and UAE speeds Hormuz bypass amid persistent oil supply fears
The Jul’26 Brent futures contract was under pressure this afternoon and dropped from $109.46/bbl at 15:11 BST to $103.28/bbl at 16:18 BST, supported at $106.00/bbl at 17:30 BST (time of writing).
Al Arabiya reported that the finalisation of the agreement between the US and Iran may be announced within hours, and this was followed by a pool report in which President Trump said the US was in 'final stages' of talks with Iran. The EIA reported that US crude inventories fell by 7.86 mb in the week to 15 May, a more significant decline than the forecast of 2.9 mb. The UAE said its new West-East crude pipeline bypassing the Strait of Hormuz is already about 50% complete and is being accelerated for a 2027 launch. ADNOC chief Sultan Ahmed al-Jaber warned that even if the conflict ended immediately, oil shipments through the strait may not recover to 80% of pre-war levels until 2027, while revealing the UAE suffered over 3,000 missile and drone attacks on civilian infrastructure, including ADNOC facilities. He also defended the UAE’s recent exit from OPEC as a strategic move to boost production capacity, warning the world is underinvesting in energy supply just as AI-driven electricity demand rapidly increases. Finally, at the time of writing, the front-month (Jul/Aug) and 6-month (Jul/Jan) Brent futures spreads are at $3.85/bbl and $18.68/bbl, respectively.
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