Brent Crude Falls 19% from April Peak to Settle at 94.66 as US and Iran Near 60-Day Hormuz Ceasefire Extension

Brent crude futures settled at $94.66 per barrel on Friday's ICE close, per ICE Futures Europe data, down 2.9% from Thursday's session. WTI front-month futures fell to $90.54 per barrel on Friday on CME, declining 2.69% on the day, per CME Group data. Both benchmarks have retreated 19.3% from their April 2026 highs as US and Iranian negotiators move toward signing a 60-day memorandum of understanding to formally extend the ceasefire governing the Strait of Hormuz.

From $117 to $94: The Arc of the Hormuz Shock

The US and Israel launched military strikes on Iran on February 28, 2026. Iran responded by restricting commercial tanker traffic through the Strait of Hormuz, the chokepoint that handles roughly 20% of global crude oil consumption. Brent reached $117.29 per barrel in April 2026 as supply disruption fears peaked. A fragile ceasefire took effect on April 8 and diplomatic talks have since brought prices back to their current range.

US and Iran Agree on Terms of 60-Day MOU

US and Iranian negotiators have reached a preliminary agreement on the terms of a 60-day memorandum of understanding, per Axios reporting on May 28 and PBS Newshour confirmation. The framework calls for unrestricted commercial shipping through the Strait of Hormuz. Iran would remove all mines within 30 days of the agreement taking effect, per Al Jazeera. The US would proportionally lift its naval blockade of Iranian ports as commercial traffic resumes. President Trump had not provided final approval as of June 6, and Lebanon-related tensions continued to complicate the path to a final signature.

Saudi Revenue Impact: 240 Million Dollars Per Day at Stake

The $23.29-per-barrel retreat from April's Brent high to Friday's settle creates a meaningful revenue gap for OPEC's largest producer. Saudi Arabia's OPEC+ quota for June 2026 stands at 10.291 million barrels per day, per OPEC data released after the May 3 ministerial meeting. At that $23.29-per-barrel differential, Saudi Arabia's daily export revenues are $239.7 million below their April peak-pricing level, based on Oil Authority's calculation. Over June's 30 days, that gap compounds to $7.19 billion in foregone revenue compared to peak April pricing.

China Crude Imports Fall to Decade Low

The demand picture adds pressure from the other side of the ledger. China's seaborne crude imports fell to 6.36 million barrels per day in May 2026, the lowest level since October 2016, per Reuters analysis by Clyde Russell published May 31. February imports stood at 11.39 million barrels per day, the last full month before the US-Israel strikes on Iran. The drop of 5.03 million barrels per day from February to May represents one of the largest short-term demand disruptions in China's crude market since the COVID lockdowns of 2022. Chinese refiners both lost access to Hormuz-routed supply and cut purchases voluntarily as prices surged.

OPEC+ Adds 188,000 Barrels Per Day for June, First Decision Without UAE

OPEC+ agreed on May 3 to add 188,000 barrels per day of production for June 2026, its first collective output decision since the UAE formally departed the organization on May 1. Saudi Arabia and Russia each took on 62,000 barrels per day of the increase. Their respective required production levels rose to 10.291 million and 9.762 million barrels per day. The modest increase was widely described as symbolic given that Iran's exclusion from group output had already removed 7.88 million barrels per day from OPEC's collective production in March.

TTF Holds Premium Amid Ceasefire Uncertainty

European natural gas prices maintained a risk premium even as oil retreated. TTF natural gas front-month futures settled at 48.76 EUR per megawatt-hour on Friday on ICE, up 5.3% for the week, per ICE data. That weekly gain reflected European buyers' concern that a ceasefire breakdown could restrict LNG cargo availability at a time when European storage operators are racing to refill inventories ahead of winter. JKM, the Asian LNG benchmark for spot cargoes, was trading in the mid-18-dollar-per-MMBtu range for July delivery as of late May, per S&P Global Commodity Insights Platts assessments.