The Strait of Hormuz reopening has unleashed a wave of crude into global markets, overwhelming demand and sending prices tumbling. Following the US-Iran interim agreement, cargoes are flowing freely while strategic releases and dark shipments from the Persian Gulf add to the glut. Traders report buyers are inundated with offers across Europe and Asia.

Angolan crude is trading at discounts of nearly $10 a barrel below Dated Brent — the steepest in over a decade. Middle Eastern grades show bearish contango structures, signaling oversupply, while the global Brent benchmark fell below $75 a barrel for the first time since the war began. Goldman Sachs commodities co-head Daan Struyven noted buyers actually get discounts for immediate purchases versus future delivery.

The market has flipped dramatically from April's panic-driven peak of $140 a barrel for Dated Brent to roughly half that value. UAE exports reached 85% of prewar levels by early June, with 60 million barrels sold in tenders. Iranian shipments of 30 million barrels to Asia and Saudi tanker giant Bahri's activity signal trapped oil hitting markets.

Despite oversupply concerns, perilously low stockpiles leave markets vulnerable. US crude inventories sit at their lowest since 1984, though stronger US prices have curbed export demand. The International Energy Agency forecasts significant surplus in 2027, but inventory rebuilding could absorb some excess supply.