Oil prices fall to 3.5-month low as Iranian exports surge

The resumption of shipping through the Strait of Hormuz after the signing of a ceasefire memorandum by the US and Iran, as well as the initial results of negotiations between the parties, continue to exert strong pressure on the global oil market.

 

According to MarineTraffic, shipping through the Strait of Hormuz has increased dramatically. While only 32 ships crossed the strait between June 12 and 14, this figure almost tripled to 93 ships between June 19 and 21.

 

An additional factor was the partial easing of US sanctions on the trade in Iranian oil, which allowed for a significant increase in its supplies to the world market.

 

According to TankerTrackers, Iran has already exported about 36 million barrels of crude oil since the memorandum was announced, with about the same amount still on tankers awaiting shipment. Meanwhile, The Wall Street Journal reports that Iran transferred about $3.84 billion through the cryptocurrency exchange CoinEx, which the publication believes confirms the proceeds from oil sales.

 

Analysts also note that additional supplies of Iranian oil could partially displace Russian Urals oil from the Indian market.

 

Against this background, August Brent crude futures fell another 4% on Thursday to $74/barrel. Over the past two weeks, quotes have already lost 26% and dropped to their lowest level in 3.5 months. The main reason for such a sharp decline was the massive outflow of speculative capital from the oil market. At the same time, physical buyers have already stepped up purchases to replenish strategic reserves.

 

Despite easing sanctions on Iran, the US has not extended similar exemptions for Russian oil. This could limit further growth in Russian crude exports and increase the amount of oil that will accumulate on tankers.

 

According to Bloomberg estimates, Russia exported a record amount of oil in the week from June 15 to 21 since the beginning of 2026. During this period, 38 tankers shipped 28.79 million barrels, or 4.11 million barrels per day. The current export rate already exceeds the annual average of all years since the start of the full-scale invasion of Ukraine.

 

At the same time, according to Vortexa, the volume of crude oil stored on tankers for more than seven days increased by 18% in the week to June 19 to 90.86 million barrels, indicating a gradual accumulation of supply on the global market.

 

According to the EIA report, as of June 19, US crude oil inventories remained 6.5% below the seasonal average of the last five years. Inventories at Cushing, the base delivery point for WTI futures, fell by another 1.08 million barrels in the week to the lowest level in almost 12 years. Gasoline inventories also remain 5.6% below the five-year average. This creates the prerequisites for further replenishment of the strategic reserves with cheaper oil from the US.

 

Adding to the uncertainty was the strong earthquakes that struck Venezuela and Guyana overnight, countries that are important suppliers of oil to the US market. If the event leads to disruptions in production or exports, it could temporarily support oil prices and limit further price declines.

 

The drop in oil prices has already led to a sharp drop in the cost of nitrogen fertilizers and continues to reduce the economic attractiveness of biofuel production. This will continue to put pressure on corn prices, as well as palm, soybean and rapeseed oil prices in the coming weeks.