Oil Prices Decline Despite Ships Still Trapped
Friday, June 19, 2026
Market Overview
The signing of a ceasefire agreement between the United States and Iran may create a 60-day evacuation window for all oil tankers that have been stranded since March in the Persian Gulf; however, to date, the outflow rate has been surprisingly low. With the Israel-Lebanon issue looming, Iran has attempted to reassert control over Hormuz in the days following President Trump's signing of the Memorandum of Understanding (MoU), but the oil market still anticipates that the expected reopening will occur sooner or later.
ICE Brent is expected to close this week down $8 per barrel from last week, falling to $80 per barrel.
OPEC Predicts Unlimited Oil Demand Growth
OPEC has published the 2026 edition of the World Oil Outlook, raising expectations for crude oil demand growth, projecting an additional 8 million barrels per day from now until 2030, with peak consumption reaching approximately 124 million barrels per day by 2050.
| OPEC oil demand forecast (million barrels/day) | 2026 | 2030 | 2050 |
|---|---|---|---|
| Total demand | 102 | 110 | 124 |
| Additional growth | - | 8 | 14 |
Tehran Aims to Reassert Hormuz Control
Tehran has announced that vessels passing through the Strait of Hormuz still require permission from the Gulf of Arabia Strait Authority to traverse this vital waterway, potentially setting the stage for future fee agreements if the current 60-day ceasefire agreement expires.
White House Allows Russian Sanctions Waivers to Expire
The White House has allowed the expiration of sanctions waivers for Russian oil on June 17 after President Trump suggested that the US-Iran ceasefire agreement would increase global crude oil supply, putting pressure on Moscow as its oil exports surged to 6 million barrels per day in May.
Iranian Oil Resumes Flow
Iranian crude oil exports have resumed after three tankers with a total capacity of 5 million barrels have passed through the Gulf of Oman this week, marking the end of the US-imposed blockade on Tehran's oil flow for two months and paving the way for the recovery of Gulf exports.
Norway's Equinor Abandons Renewable Energy Goals
State-owned Norwegian oil company Equinor NYSEEQNR has officially abandoned its 2030 renewable energy targets, informing investors at the New York Capital Market Day that it will allocate 90% of its capital expenditure to oil and gas projects, up from the 50% commitment made one year ago.
| Equinor investment strategy | 2025 | 2026 |
|---|---|---|
| Capital allocation to oil and gas | 50% | 90% |
| Capital allocation to renewable energy | 50% | 10% |
Brazil Looks to End Fuel Subsidies
The Brazilian government will end fuel subsidies for diesel and gasoline if crude oil prices stabilize for at least one month around the $80 per barrel mark, according to the country's Ministry of Finance, with estimated monthly subsidy costs of approximately $600 million.
Pakistan Increases Coal Usage
Coal-fired power generation in Pakistan has risen to a record high of 4.28 GW in May, led by increased coal imports as the country's regular LNG shipments from Qatar were disrupted due to the closure of the Strait of Hormuz just as temperatures began reaching 45-50°C.
Kuwait Lifts Force Majeure Measures
Kuwait, one of the most affected countries in the Middle East, saw its production drop from 2.6 million barrels per day in February to just 580,000 barrels per day last month, has lifted all previous force majeure measures on upstream operations, seeking to restore production levels.
China Increases Coal Imports Due to Mine Closures
Coking coal imports to China are expected to increase in 2026 after more than 150 mines remain closed in Shanxi province, the country's largest coal-producing region, with buyers turning to Canada and Australia to compensate for the shortfall.
Iraq Begins Production Increase
Oil production in southern Iraq, the region most affected by the closure of the Strait of Hormuz, is showing signs of rapid recovery after the state-owned Basra Oil Company announced they are currently pumping approximately 1.5 million barrels per day, up from around 900,000 barrels per day a month earlier.
| Iraq oil production (million barrels/day) | Pre-crisis | May 2026 | Current |
|---|---|---|---|
| Southern region | 2.1 | 0.9 | 1.5 |
| Nationwide | 4.5 | 2.8 | 3.7 |
Iron Giant Slides Due to Cost Overruns
Shares of the world's largest iron ore miner BHP NYSEBHP fell more than 5% on Friday after the Australian conglomerate warned about cost overruns and a $2.3 billion fee at its Canadian Jansen potash project, the third time the project has exceeded cost estimates.
Aramco Seeks Storage Facilities
Saudi Arabian national oil company Aramco TADAWUL2222 is actively seeking to develop additional international crude oil storage facilities amidst the ongoing US-Iran conflict, currently operating some storage facilities in South Korea, Japan, and Egypt.
Ukraine Attacks Moscow Oil Refinery
Ukraine has carried out its second drone attack on a Moscow oil refinery in just a few days, with the 240,000 barrels per day refinery immediately suspending sales of petroleum products on Russia's Spimex exchange, raising concerns about exacerbating the gasoline shortage in the country.
Iraq Seeks to Redirect Oil from Hormuz Despite Ceasefire
The Iraqi government is targeting the export of 50,000 barrels per day of crude oil through Syrian territory from July, based on the success of recent fuel oil and naphtha rerouting shipments, with Baghdad aiming for these flows even if the US-Iran ceasefire agreement remains in place.
By Tom Kool for Oilprice.com