Oil falls ~20% off its wartime peak as Hormuz reopens
The US-Iran MoU sends Brent toward $77 and Aramco cuts its July price to Asia — even as the war banked Riyadh a routing windfall through the East-West pipeline
Summary
Oil fell roughly 20% from its 2026 wartime peak as the US-Iran MoU reopened the Strait of Hormuz; after the 17 June signing Brent dropped to about $77 a barrel, a three-month low, with sharp swings around postponed talks and renewed-strike threats. Saudi Aramco followed by cutting its July Arab Light price to Asia by $6 to +$9.50 over Oman/Dubai — a larger-than-expected second straight monthly cut. Yet the war was not a clean loss for Saudi Arabia: Riyadh rerouted around 4 mb/d via the East-West (Petroline) pipeline to Yanbu, selling into the spike, and one estimate put weekly oil revenue about 10% above pre-war levels at the peak. With Hormuz reopening and OPEC+ unwinding cuts, the price slide now squeezes the breakeven the kingdom needs after a record deficit.
By the numbers
- ~20% — fall in oil from its 2026 wartime peak.
- ~$77 — Brent after the 17 June MoU, a three-month low.
- $6 — Aramco's July Arab Light cut to Asia, to +$9.50 over Oman/Dubai.
- ~4 mb/d — crude Riyadh rerouted via Petroline to Yanbu during the closure.
Why it matters
The same chokepoint that crushed Saudi export volume in Q1 handed it a pipeline-routing windfall on price; reopening reverses both — volumes return but prices fall. For Mohammed Bin Salman, the ceasefire is a mixed settlement: barrels flow again, but the revenue per barrel that financed Vision 2030 erodes.
What to watch
- Where Brent settles as Hormuz traffic and OPEC+ supply normalise.
- Aramco's August OSP as a read on Saudi market strategy.
- The oil-price breakeven against the kingdom's widened deficit.