Brent slips to $69.42, first contango since the Hormuz war, as ceasefire supply returns
The benchmark settles below $70 and flips its curve structure for the first time since before the strait closed
Summary
Brent Crude settled at $69.42 on June 25, down from $73.74, with the forward curve shifting into contango for the first time since the Strait of Hormuz closure began. Contango, where near-term contracts trade cheaper than future ones, signals that physical supply is now exceeding near-term demand as Iran and Gulf producers restore output following the June 17 ceasefire. The move reverses the backwardation that persisted through the Hormuz disruption and confirms that the supply-shortage risk premium is gone.
Why it matters
Contango matters beyond the price level. It changes the incentive to hold physical oil, encourages storage builds, and signals to OPEC that any further output increase will face a softer market. The shift will flow into headline energy inflation in the coming weeks, easing pressure on central banks in Europe and Asia that raised rates in response to the wartime spike.
What to watch
- Whether OPEC-plus members hold to the post-ceasefire production agreement or add barrels opportunistically.
- Brent's path relative to the $65 floor that several producers need to balance budgets.
- Storage build data from the IEA and EIA over the next two weekly reports.