Wood Mackenzie / IndexBox: Brent Crude Price Outlook — June 24, 2026

Date: June 24, 2026
Authors: Alan Gelder and Andrew Harbourne (Wood Mackenzie)
Published via: IndexBox
URL: https://www.indexbox.io/blog/brent-crude-price-swings-as-us-iran-mou-eases-strait-of-hormuz-crisis/

Key Facts

Price Forecast

  • 2026 full-year Brent average: $92/barrel (buoyed by elevated prices March-May)
  • 2027 full-year Brent average: $78/barrel
  • Brent may slip to $70/barrel by Q4 2027
  • Assumes Strait of Hormuz transit flows normalize during August 2026

What Changed: Investor Positioning

  • In the four weeks to June 16, investor positioning for higher Brent prices fell by ~80% from a five-year high
  • Price direction was always "binary": prolonged closure → $150+; reopening → bubble bursts

The Quick Peace Scenario

  • Current market sentiment aligns with the "Quick Peace" scenario from Wood Mackenzie's May 2026 Horizons report
  • MoU signed June 17 establishes basis for comprehensive agreement in 60-day negotiation window

Risks to the Reopening Timeline

  • Israel's Lebanon operations are the primary fault line — apparent rejection of restrictions on its operations in Lebanon
  • US vs. Iran disagreement on method/timing: US hopes for reopening within 2 weeks to 30 days; Iran states it will reopen "under Iranian arrangements" and limited to seven-hour weekday windows
  • Risk: negotiations extended, fail entirely, or result in terms significantly different from pre-war free flow

The Role of Inventory Drawdowns

  • Market relied on inventory drawdowns to keep prices in check (absence of 11M+ b/d crude production and 3M b/d refining capacity)
  • Drawdowns were accelerating toward a crisis point
  • US oil inventories at Cushing near operational floor; Trump acknowledged on June 15 the country would run out of reserves in ~4 weeks

Timeline for Normalization

  • First step: Shipowners, crews, and insurers need assurance of safe passage
  • Outbound preference: Risk calculus for outbound transit of trapped vessels is more compelling than inbound (shipowners must gamble Strait stays open for full round-trip)
  • Vessel Tracker: traffic increased from low teens/day to peak of 35 transits on June 18 — promising but well below pre-war
  • ~60 million barrels of oil held in vessels trapped in the Gulf will reach consumer markets once Strait is safe

Production Recovery Timeline

  • Wood Mackenzie's May analysis: 70% of the 11M+ b/d shut-in production back onstream within 3 months; 90% within 6 months
  • Final 1M b/d will take considerably longer

Product Markets Still Elevated

  • Jet crack spreads remain almost double pre-war levels despite progressive easing
  • Lingering issues: (a) concerns about product availability, (b) refiners capable of delivering jet fuel while Gulf exports constrained continue to generate significant profits

Analytical Notes

  • The $92/$78 forecast is the most credible forward-looking benchmark in the KB right now — built on actual Wood Mackenzie modeling
  • The 70%/90% recovery in 3/6 months is faster than many earlier estimates — consistent with Calhoun's finding that the crisis was less physically damaging than feared
  • The seven-hour weekday window is a critical new constraint that could make the "reopened" Strait functionally different from pre-war
  • Jet crack spreads staying elevated despite the ceasefire signal product market tightness will outlast the crude price relief
  • The $70 Q4 2027 forecast implies a genuine glut scenario as supply fully returns and demand destruction lingers