Brent Settles at $76.99 as Goldman and Wood Mackenzie Split on Hormuz Recovery Timeline

Brent crude declined to $76.99 per barrel on Tuesday, down $0.91 or 1.2% from Monday's close, per Trading Economics data reflecting the ICE close. WTI fell to $73.15 per barrel on the CME session, a drop of $0.71. Both benchmarks settled near their pre-conflict baselines as markets absorbed two competing analyst forecasts, both published Tuesday, that diverge on when the Strait of Hormuz will fully normalize.

The backdrop is a five-week price collapse driven by diplomacy. Wood Mackenzie data show Brent averaged $92 per barrel through the first half of 2026, sustained by the closure of the Strait of Hormuz following the February 28 US-Israeli military campaign in Iran. Al Jazeera reported on June 17 that Brent at $78.24 was then "only about 7 percent higher than before the US and Israel launched attacks," implying a pre-attack Brent baseline of approximately $73 per barrel. At Tuesday's $76.99, Brent has narrowed that gap to roughly 5% above the pre-war baseline, pricing out more than $15 per barrel of conflict premium in five weeks.

Goldman Targets July 31; Wood Mackenzie Points to August

Goldman Sachs now expects Persian Gulf oil exports to return to pre-war levels by July 31, 2026, one month earlier than its previous assumption. The bank cut its Q4 2026 Brent forecast to $80 per barrel, down from $90, and trimmed its 2027 Brent average to $75 per barrel from $80. WTI is projected at $75 per barrel for Q4 2026, declining to $70 in 2027.

Wood Mackenzie's revised forecast, also published Tuesday, assumes Hormuz transit flows normalize during August 2026. The consultancy targets a 2027 Brent average of $78 per barrel, with prices potentially easing to $70 per barrel by Q4 2027. Alan Gelder, Senior Vice President for Macro Oils at Wood Mackenzie, notes that the final approximately one million barrels per day of shut-in Gulf supply will take "considerably longer" to restore, given the complexity of field infrastructure restart.

The 330-Million-Barrel Q3 Timing Gap

The one-month difference between Goldman's July target and Wood Mackenzie's August assumption carries a concrete supply implication. Wood Mackenzie estimates that 11 million barrels per day of Gulf crude and condensate production was disrupted at peak. A 30-day delay in full normalization equals 330 million barrels of cumulative supply that either returns to market in Q3 or does not. At Tuesday's $76.99 Brent close, that timing difference represents roughly $25.4 billion in available supply value over a single quarter.

On 2027 Brent, Goldman at $75 and Wood Mackenzie at $78 reflect different readings of how quickly Iran, Iraq, Saudi Arabia, and Kuwait can ramp back to pre-conflict output. Goldman's faster July timeline allows for sharper price normalization through the year. Wood Mackenzie's higher 2027 average reflects its judgment that recovery bottlenecks, particularly in Iraq, will persist well into next year.

Recovery Path: Fast Starters and Slow Movers

Wood Mackenzie projects 70% of shut-in volumes returning within three months of Hormuz reopening, and 90% within six months. Saudi Arabia and the UAE are expected to ramp fastest, given their newer reservoir quality and bypass pipeline infrastructure. Iraq faces the slowest path back, given older reservoir maturity and the operational complexity of restarting gas handling and water reinjection systems simultaneously.

Vessel traffic through the strait already shows an early signal. On June 18, 35 ships transited the waterway, compared with a daily average in the low teens during the peak crisis. That uptick aligns with Iran's acceptance of a 60-day US crude sales license under the June 18 memorandum of understanding. Tanker logistics and production infrastructure must both ramp in parallel before that traffic increase translates into delivered barrels at global refineries.

Upside Risk: What Happens If the Deal Stalls

Both Goldman and Wood Mackenzie treat the US-Iran peace framework as the base case, but both acknowledge material execution risk. Goldman Sachs projects that if Hormuz disruptions persist through 2027, Brent could exceed $130 per barrel in late 2026 and average $105 the following year. Wood Mackenzie had previously modeled a prolonged-closure scenario that would push Brent well above $150 per barrel. The 60-day MoU negotiation window means the binary outcome, full reopening versus renewed disruption, will resolve by mid-August.

Canadian Producers Watch the WCS Differential

For Canadian oil producers, Tuesday's prices create specific margin considerations. Western Canadian Select (WCS) at Hardisty traded at approximately $57.99 per barrel, a $15.16 discount to WTI's $73.15, per Live Oil Prices intraday data. Trans Mountain Expansion brought system capacity from 300,000 barrels per day to 890,000 barrels per day, narrowing the WCS-WTI differential from $18.65 in 2023 to $14.73 in 2024 according to AER data. As Persian Gulf heavy crude re-enters the market over the next three to six months, Canadian heavy oil faces potential additional differential pressure, competing against returning Mideast barrels for Asian refinery demand. Operators including Suncor Energy and Imperial Oil, the latter a subsidiary of ExxonMobil, will track Gulf ramp timing as a key variable in second-half planning.

Henry Hub natural gas settled at approximately $3.25 per MMBtu on Tuesday, the highest in two weeks, supported by stronger LNG export demand and warm-weather forecasts across the central United States. The Strait of Hormuz closure had made approximately 80 million tonnes per year of global LNG inaccessible, per Wood Mackenzie, representing roughly 20% of global LNG supply. That volume is expected to return gradually as the MoU terms take effect through July and August.