WTI Crude Oil Settles at $69.23 Friday as Hormuz Reopening Drives Brent Below Goldman and Morgan Stanley Q4 Targets

West Texas Intermediate crude oil settled at $69.23 per barrel on Friday, per OilPrice.com tracking the August 2026 CME front-month contract (CLQ26), down $2.69 or 3.74% on the session. The contract touched an intraday low of $68.56, the lowest level for WTI in 17 weeks. Brent crude declined to $73.52 per barrel on ICE, down $1.98 on the day. Henry Hub natural gas settled at $3.2530 per MMBtu, per CME data.

Hormuz Transit Resumes, Supply Premium Unwinds

The Strait of Hormuz, closed to most commercial tanker traffic since the conflict began in late February 2026, has begun reopening under a provisional US-Iran memorandum of understanding signed June 17 at the G7 meeting in Versailles. Maritime traffic through the strait had choked off an estimated 14 million barrels per day of oil supply, per Al Jazeera reporting citing tanker-tracking data. Vice President JD Vance confirmed that 12.5 million barrels of oil flowed through the strait in the initial days following the deal. Iran's Persian Gulf Strait Authority is waiving transit fees for the 60-day negotiation window, though vessels must submit transit requests before arrival.

The market has been pricing out the Hormuz risk premium in stages since the MoU was announced. Crude's day range on Friday stretched from $68.56 to $71.86, per OilPrice.com, reflecting residual uncertainty over the pace of supply restoration. PBS NewsHour reported that full oil flow normalization could take weeks or months even with the transit deal in place, as production logistics and shipping reroutes require time to adjust.

Goldman and Morgan Stanley Q4 Targets Already Breached

Goldman Sachs analyst Daan Struyven cut the bank's fourth-quarter 2026 Brent forecast to $80 per barrel from $90 on June 16, and lowered the 2027 average to $75 per barrel from $80. Simultaneously, Goldman accelerated its timeline for when Persian Gulf exports return to pre-war levels, moving the target date to the end of July. Morgan Stanley analyst Martijn Rats issued a parallel revision, cutting Q3 2026 Brent to $90 per barrel from $100 and Q4 2026 to $80 per barrel from $95. Rats projected that 50% of disrupted Persian Gulf production would return by September and 80% by December, per a Bloomberg report on the note.

At Friday's Brent settlement of $73.52, the market has already priced through both banks' Q4 2026 target of $80 per barrel, with more than three months remaining before that quarter begins. Wood Mackenzie, in a note published June 23 in World Pipelines, set a 2027 Brent average of $78 per barrel and signaled potential for further erosion to $70 by Q4 2027 if Hormuz normalization proceeds on schedule. The three-bank Q4 2026 consensus sits at $80 per barrel; at $73.52, Brent is already 8% below that figure. Goldman noted that a Hormuz deal collapse could still send Brent above $130 by year-end, with a 2027 average near $105.

Permian Basin: 258 Active Rigs and a $2.23 Per Barrel Margin Above Break-Even

Baker Hughes reported 258 active Permian Basin rigs for the week ending June 26, 2026, up 2 from the prior week, per Oil and Gas 360's summary of the count. The US total rig count rose to 573, gaining 10 from last week's 563. Canada added 11 rigs to reach 197. The Dallas Federal Reserve's Q1 2026 energy survey placed the average Permian Basin break-even at $67 per barrel of WTI.

At Friday's WTI settlement of $69.23 per barrel, the average Permian operator holds $2.23 per barrel of gross margin above the survey's average break-even cost, before general and administrative expenses. Most publicly traded Permian operators hedged a portion of Q3 2026 production at prices above $75 per barrel, limiting spot-price exposure for the balance of the quarter. The Permian rig count rose 2 this week despite WTI's decline, indicating producers have not yet curtailed capital programs in response to the price environment.

Canadian Oil Sands Revenue at $75.61 Per Barrel in Canadian Dollar Terms

For Alberta heavy-oil producers, the revenue picture involves two layers of discount. Western Canadian Select crude settled at a $16-per-barrel discount to WTI for June delivery, per Argus and BOE Report data from May 2026. At Friday's WTI settlement of $69.23, that differential puts WCS at $53.23 per barrel in US dollar terms. Multiplied by the Bank of Canada's June 26 exchange rate of 1.4205 Canadian dollars per US dollar, WCS revenue calculates to $75.61 per barrel in Canadian dollar terms before royalties and transportation.

Trans Mountain pipeline hit full capacity and entered apportionment in June 2026, per BOE Report, two years after completing its expansion to 890,000 barrels per day. The pipeline averaged 737,000 barrels per day in Q1 2026, or 83% of its rated capacity. Operating at apportionment narrows the WCS-WTI differential for shippers with committed capacity by securing Pacific market access for landlocked Alberta crude. Operators including Suncor Energy and Imperial Oil benefit from firm Trans Mountain commitments when spot capacity is oversubscribed.

Imperial Oil is 70.4% owned by ExxonMobil, making the WCS revenue calculation a direct input into ExxonMobil's upstream Canadian segment results. At C$75.61 per barrel, oil sands producers operate in a tighter revenue environment than the C$85 to C$90 per barrel range that prevailed when WTI was above $80 during the peak of the Hormuz crisis. Operators with lower steam-to-oil ratios carry lower per-barrel costs and are better positioned to sustain production at current price levels.