Oil Heads for Fourth Straight Weekly Loss as Hormuz Flows Resume, Splitting Citigroup and Morgan Stanley by $15 on Brent

ICE Brent crude futures traded at $71.86 per barrel in Thursday trading, fractionally changed from Wednesday's close, as the reopening of the Strait of Hormuz maintained broader downward pressure through the week. CME WTI front-month contracts tracked at $68.59 per barrel, off 0.15%, per OilPrice.com data as of Thursday morning. Both benchmarks are on course for a fourth consecutive weekly decline. Brent settled at $73.45 on June 30, per data in Oil Authority's analysis of the North Sea benchmark's structural shift, putting Thursday's level roughly 2.6% below that Monday close in three sessions.

Saudi Arabia Rushes Pent-Up Crude Through Reopened Strait

Saudi Aramco has moved approximately 10 million barrels of crude through the reopened Strait of Hormuz in recent days, per Reuters shipping data reported by OilPrice.com on July 2. At least five supertankers have departed Ras Tanura port since the strait reopened, with four additional VLCCs positioned at the terminal, one laden and three awaiting loading. Two tankers are bound for China and two for Japan. During the conflict, Saudi Arabia redirected exports through its East-West pipeline to Yanbu port on the Red Sea, a workaround with a capacity ceiling well below full Saudi export volumes. The strait reopening has released pent-up supply that accumulated during the transit disruption, adding to a market already contending with weak Chinese demand.

Three Banks, Three Forecasts, a $15 Gap

Citigroup analysts, in a note published July 3, see Brent falling to $60 to $65 per barrel by year-end 2026. The bank expects the US-Iran memorandum of understanding to “hold and turn into a deal over the coming months,” normalizing Hormuz traffic and adding supply the market cannot absorb at current demand levels. Citi cited weak Chinese demand and a surge of prompt Middle Eastern supply as the primary drivers. Goldman Sachs and Citigroup jointly project a 2 to 3 million barrel per day surplus building in 2027.

Morgan Stanley's position sits between the more bearish Citigroup view and recent spot levels. The bank cut its Q3 and Q4 2026 Brent forecasts to $75 per barrel each, down from prior targets of $90 and $80, and projects Brent at $70 by end of 2027. Morgan Stanley cited “the return of oil supply from the Middle East, combined with high US oil exports and still weak Chinese crude purchases.” Goldman Sachs cut its Q4 2026 Brent target to $80 per barrel and its 2027 average to $75, down from $90 and $80, while warning that Hormuz tanker traffic may never fully return to pre-war levels. At Thursday's $71.86 Brent level, Morgan Stanley's $75 Q3 target implies roughly 4.4% upside, placing the most bullish major bank estimate just $3.14 above the current market price.

Market Structure Confirms the Bearish Direction

Beyond the spot price, the shape of the ICE Brent forward curve has shifted. ING strategists Warren Patterson and Ewa Manthey noted this week that “the increase in oil flows is putting growing pressure on the front end of the ICE Brent forward curve.” The market has moved into contango, where near-term futures trade below forward contracts. That structure is associated with building inventories and easing near-term supply concerns, reinforcing the view that Hormuz normalization is adding supply faster than demand can absorb it.

Demand signals from Asia support the same conclusion. China's crude imports fell to 5.8 million barrels per day in June, down from 6.8 million bpd in May. India, meanwhile, built combined commercial, strategic, and refinery reserves to 104 million barrels by end of June, up from 90.5 million barrels at end of April. The build came from record imports of 5 million barrels per day in June, sourcing 2.6 million bpd from Russia, according to OilPrice.com. Those reserve levels suggest Indian buying will slow in coming months, removing one demand support that kept prices elevated during the conflict period.

Baker Hughes Rig Count and the Next Data Releases

Baker Hughes is expected to release its weekly North American rig count Thursday rather than Friday, with US markets closed for the July 4 Independence Day holiday. Thin pre-holiday trading Thursday afternoon may amplify price swings in either direction. The next major US oil market data point is Wednesday July 8, when the Energy Information Administration releases its weekly crude inventory report. Holiday-week staffing at trading desks will be light through Friday, limiting liquidity at a moment when the Hormuz normalization narrative is still developing day by day.