Brent Closes Above Goldman Q4 Target as Rubio Signals End to Russian Oil Sanction Waivers

WTI crude settled at $96.02 per barrel on Tuesday's CME close, up 2.41% on the day, per Rigzone market data. Brent crude gained 1.89% to close at $97.81 per barrel on the ICE. Both benchmarks have now risen for three consecutive sessions, extending a geopolitical risk premium that investors have not surrendered.

Ole Hansen, Head of Commodity Strategy at Saxo Bank, attributed Tuesday's rally to growing market pessimism about the prospects of a US-Iran agreement that could reopen the Strait of Hormuz. The Strait channels roughly 21 million barrels per day, approximately one-fifth of global oil consumption. Any further delay in normalization extends a supply squeeze that has driven prices above analysts' pre-summer projections.

Brent Is Already Above Goldman's Q4 Base Case

Goldman Sachs raised its fourth-quarter 2026 Brent forecast to $90 per barrel in a note published April 26-27, lifting the projection from $80 per barrel on expectations that Hormuz flows would not normalize until end of June rather than mid-May. Tuesday's $97.81 ICE close puts Brent $7.81 per barrel, or 8.7%, above that Q4 target. Goldman's Q3 2026 Brent forecast stands at $82 per barrel; the benchmark is now trading $15.81 above that level as well.

Goldman's analysts flagged a severe upside scenario in the same note: if ceasefire talks collapse and Middle East output losses reach 2 million barrels per day, Brent could average $115 per barrel in the fourth quarter. Traders are taking that scenario more seriously today than when Goldman first published it. The $7.81 premium over Goldman's Q4 base case, applied across roughly 100 million barrels of daily global oil demand, represents $781 million per day in additional crude costs versus Goldman's forecast.

Rubio Signals Russian Oil Waivers Will Expire June 17

Secretary of State Marco Rubio testified before the Senate Foreign Policy Committee on Tuesday and said the United States "would like to end it as soon as we possibly can because the underlying policy of this country has been to sanction their oil." The Trump administration has extended an initial one-month waiver on Russian crude sales three times since mid-March, each authorization allowing Russian crude already loaded on tankers to reach international buyers. The current extension runs until June 17, and Rubio's statement signals it will not be renewed.

The waivers have served as a lifeline for Asian importers during the Strait of Hormuz disruption. Russia exports 4 to 5 million barrels per day of crude, with China absorbing 49% and India 37% of the total since December 2022, according to the Centre for Research on Energy and Clean Air. India, Indonesia, and Turkey lobbied Washington for extended waivers, citing the Iran-driven supply crunch as their primary argument.

Russia's export capacity had already contracted before the formal waiver debate. Ukrainian drone strikes cut Russian seaborne crude volumes 24% month-over-month in April, the Centre for Research on Energy and Clean Air reported. Shadow tankers carried a record 54% of Russian seaborne oil in April as Moscow routed supply through non-G7 vessels.

Alberta Oil Sands See Elevated Netbacks at Current Prices

Western Canadian Select, the heavy crude benchmark for Alberta oil sands output, typically trades at a discount to WTI based on transportation costs and crude quality. The Alberta Energy Regulator's 2026 Outlook projected a WCS-WTI differential of $12 per barrel. At Tuesday's WTI close of $96.02, that differential implies WCS at $84 per barrel on a US-dollar basis, well above the AER's full-year average WCS forecast of $56 per barrel.

Suncor Energy, Canadian Natural Resources, and Cenovus Energy, Canada's three largest oil sands operators, all see improved cash flows when WCS trades above $80 per barrel. Canadian producers price crude in US dollars while paying the majority of operating costs in Canadian dollars. At $84 per barrel implied for WCS, current prices represent a significant improvement for heavy oil producers over the AER's own full-year 2026 WCS forecast.

What Has Changed Since the Last WTI-Brent Settlement Report

When Oil Authority reported on the WTI-Brent settlement alongside the Iran strike on Kuwait and the Ceyhan shortfall, markets were pricing a discrete event-driven shock. Since that report, Goldman raised its Q4 Brent target twice, from $71 in March to $90 in late April, and the market has now climbed past that raised ceiling. Three supply risks have compounded into a structural premium: Hormuz timeline uncertainty, shrinking Russian seaborne exports, and now the June 17 waiver expiry Rubio flagged Tuesday.