Brent Crude Tops $73 as Iran Tanker Attacks Shadow Hormuz Deal, Saudi Aramco Cuts July OSP by $6

WTI crude was trading at $70.97 per barrel as of late morning Monday on the CME, up $1.74 or 2.51 percent on the day. Brent crude reached $73.38 per barrel on ICE, up $1.39 or 1.93 percent. Both benchmarks reversed Friday losses after a weekend of tanker attacks in the Strait of Hormuz renewed doubts about the durability of the June 27 reopening agreement.

Weekend Events: Tanker Attacks and a Ceasefire

On Thursday, an attack struck the container ship Ever Lovely in the Strait of Hormuz and shipping companies paused transits. The United States military launched strikes on Iranian targets in response on Friday. A Panama-flagged tanker, the Kiku, then came under attack Saturday, prompting additional US strikes and a helicopter crash near Ras Tanura that killed 14 people. The two sides agreed a ceasefire over the weekend, but by Monday morning a senior Israeli security official reported a surge in Iranian cyberattacks. Negotiators relocated nuclear talks from Switzerland to Qatar, with the new session focused on Hormuz transit terms.

The June 27 Hormuz MOU

US President Donald Trump and Iranian President Masoud Pezeshkian signed a memorandum of understanding on June 27 calling for full Hormuz reopening without Iranian tolls for at least 60 days, running until approximately August 21. Gulf producers moved immediately. Saudi Arabia had four very large crude carriers loading at Ras Tanura by Sunday, with one already transiting Hormuz toward Japan. Iran's Kharg Island also resumed loadings under a parallel 60-day US sanctions waiver.

Clearing the ship backlog from weeks of restricted transit will take 10 to 15 days at minimum, per shipping analysts cited by Reuters. Shipping confidence has remained unstable since Thursday's attack, with some shipowners pausing transits to assess risk. Mine-clearance operations add a further constraint, with Western estimates placing earliest normalization of full commercial traffic around late July.

Saudi Aramco's $6 OSP Cut: Supply Signal or Price War?

Saudi Aramco's July official selling price to Asia, released June 8, set the Arab Light premium at $9.50 per barrel over the Dubai/Oman benchmark. That is $6 per barrel below June's $15.50 level, itself $4 below May's $19.50 premium. In two months, Arab Light's premium over Dubai/Oman shed $10 per barrel. Aramco is expected to cut August OSPs by a further $6.50 to $8.00 per barrel, per trade press reports, as Hormuz supply resumes and competition from Russian ESPO Blend intensifies.

Sinopec, China's largest refiner, made zero purchases of Saudi crude for July, marking the second consecutive month of zero offtake, per House of Saud Research. Asian refiners had shifted to Russian ESPO Blend when the Arab Light-ESPO spread exceeded the $5 to $7 per barrel switching threshold. Aramco's OSP cuts aim to recapture that market share.

Markets Too Complacent, ING Warns

ING's commodities strategists Warren Patterson and Ewa Manthey wrote Monday that markets appear to be "shrugging off" the weekend attack developments, focusing instead on supply recovery from resumed Hormuz flows. They cautioned the stance creates "significant upside risk" if the supply recovery stalls or re-escalation occurs. Global oil inventories stand at multi-decade lows, amplifying exposure if Hormuz flows are again disrupted.

Western Canadian Select: Implied Effective Price

WCS crude for July delivery at Hardisty, Alberta settled at $12.40 per barrel below WTI on June 3, the most recently reported differential from BOE Report. At WTI's late-morning Monday level of $70.97 per barrel, that differential implies a WCS effective price of approximately $58.57 per barrel. Alberta oil sands producers benefit from sustained WTI gains, since the WCS-WTI differential sets the netback they receive after pipeline transportation costs.