Saudi Oil Through the Strait of Hormuz Nears Pre-War Volumes After U.S.-Iran Peace Deal

The Volume Surge Confirms Rapid De-escalation of the Hormuz Blockade

The U.S. and Iran signed an interim Memorandum of Understanding on June 18, 2026, ending hostilities and lifting blockades on the Strait of Hormuz, through which roughly a fifth of global oil and LNG flowed before the war began on February 28, 2026 . Saudi Arabia's crude exports through the strait have "virtually returned to pre-war levels," approaching the ~6.3 million bpd baseline . EIA data shows Saudi volumes through Hormuz averaged 6.26–6.94 million bpd from 2020 to 2023, confirming ~6.3 million bpd was the pre-war norm .

At least five supertankers carrying a total of 10 million barrels of Saudi oil have already exited the Strait from Ras Tanura, and over 60 million barrels of crude that had been stuck in the Persian Gulf are now being released . The surge is the clearest evidence yet that the blockade that halted roughly 15 million bpd of crude shipments from the Arabian Gulf is being unwound .

Saudi Aramco's Strategic Shift to Spot Sales Signals Urgency

On July 2, Reuters reported that Saudi Aramco has switched from term contracts to spot pricing for Asian customers to accelerate sales of the pent-up supply . This marks a major departure from Aramco's traditional model, under which Asian refiners receive monthly Official Selling Prices (OSPs). The shift enables faster offloading of the ~10 million barrels per supertanker cargo now moving through the strait .

Analysts interpret the move as a dual strategy: clear the massive cargo backlog quickly, and preemptively defend market share in Asia against competing suppliers as Iranian volumes also return . The urgency reflects the fact that Asian refiners had already secured alternative crudes during the blockade, creating a risk that the returning Saudi oil would lack buyers if not priced competitively .

The Price Slide Toward $72 Reflects the New Supply Glut and Remaining Risk

On the day the deal took effect (June 18), Brent crude fell 1.4% to $78.41 . By end of June, BofA Securities projected Brent averaging $72/barrel in H2 2026, and falling to $65 in 2027 if peace holds . On July 1, Petrobras' CEO stated that oil appears to have settled into a $72–$75 range, though the market has yet to fully normalize and Middle East conflict continues creating uncertainty . By July 2, Brent had fallen to $70.41 .

The price decline reflects the market's expectation that the return of trapped Gulf supplies (~60+ million barrels) will create a near-term oversupply, especially as Asian refiners had already secured alternative crudes during the blockade . The IEA said the oil market could move into a significant supply surplus by 2027 .

Remaining Security Risks Are Substantial and Constrain the Normalization

The interim deal is only a 60-day framework, with unresolved issues including Iran's nuclear program and an ongoing Israeli offensive in Lebanon that could derail the arrangement . The EIA's June 30 Short-Term Energy Outlook assumes the Strait "will remain effectively closed in the near term" and that full resumption to pre-conflict traffic will take several months even after a formal reopening . The EIA predicts shipments through the strait will not return to pre-conflict levels until early 2027 .

Analysts at Reuters and the Atlantic Council warn that the deal is "fragile," with risks of spoilers — including hardliners in Tehran and ongoing Israeli military operations — that could collapse the ceasefire and reimpose the blockade . The AP reported that the agreement faces "significant challenges" including whether Israel will continue its offensive in Lebanon .

What This Means for Global Oil Markets

The surge in Saudi shipments through Hormuz, combined with Aramco's pricing shift and the price slide, paints a picture of a market that is pricing in normalization but hedging heavily against renewed disruption. The fact that Saudi volumes are back to near pre-war levels within two weeks of the deal taking effect is remarkable, but the 60-day clock, unresolved nuclear negotiations, and Israeli military operations mean the situation could reverse quickly. For traders and analysts, the key signal is not just the volume of oil flowing — it is the persistent discount that the market continues to apply to the risk that the Strait could close again.