Oil futures are heading toward a fourth consecutive weekly loss as tanker traffic normalizes through the Strait of Hormuz. In Asian trade Friday, Brent crude hovered in the low $70s per barrel while WTI traded below $70, recovering about 0.5% on profit-taking after three weeks of steep declines. The latest slide has brought prices back to nearly pre-war levels.
The tentative reopening of the waterway—through which roughly 20% of global oil passes—has relieved supply fears that had kept a floor under prices. Analysts at Citigroup warn that if flows continue to normalize and the U.S. and Iran finalize a deal, Brent could sink to $60–$65 a barrel by year-end. "We continue to recommend selling any summer rallies," Citi analysts wrote in a note carried by Bloomberg. The broader market remains divided, with some traders betting the ceasefire holds and others bracing for renewed disruption.
On the infrastructure front, no new pipeline or production announcements were reported in the sources. The primary driver of this week's price action is the revival of marine shipping through the Strait—a chokepoint whose closure had previously pushed premiums higher. Any sustained uptick in flows would effectively add millions of barrels per day of deliverable supply to the global market.
Geopolitically, the U.S.-Iran memorandum of understanding is the key variable. Citi expects the MOU to hold and transition into a binding deal within months, as both sides have incentives to de-escalate. A formal agreement would likely remove sanctions on Iranian oil exports, flooding the market with additional barrels and further depressing prices. However, any breakdown in talks could reverse the current trend quickly.
Counter-argument: Some analysts remain skeptical that the reopening will prove durable. Political hardliners in Tehran or Washington could scuttle negotiations, and the Strait remains vulnerable to asymmetric naval threats. A sudden disruption would erase this week's losses and potentially send prices sharply higher, making the current bearish consensus fragile.