Oil Price Analysis: Brent Falls Toward $73 as the 60-Day Deadline Looms
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Key Points:
- The Memorandum of Understanding is an interim framework, not a final deal - tolls suspended 60 days, Hormuz reopens under Iranian arrangements, missile program untouched.
- The market is in a fragile flow surplus driven entirely by suppressed Chinese refinery demand which reverses the moment crude flows normalise.
- The 60-day window is the real risk - Lebanon is not closed, Israel is not on board, and Iran has retained its leverage explicitly in writing.
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My critical assessment read of where are is below. In short, we need to make it to Fridays June 19th signing in Switzerland without major incident. But there is one actor that could completely kybosh this entire deal: Netanyahu. The US MUST, as part of this Memorandum of Understanding (MOU), restrain Israel. It is important to note that we are in NO WAY out of the woods. The material changes today are on warfare peace and a restart to transit. This is the largest positive step so far. But the industry has made other arrangements and has moved on to a large degree already.