Brent: Ceasefire risks keep upside in focus

Brent: Ceasefire risks keep upside in focus – ING

Brent Price

$90/bbl

Current Brent crude oil price following recent geopolitical developments.

Projected Price Range

$120-130/bbl

Expected price range for Brent if oil flows do not resume by late July.

Saudi Output Increase

157k b/d

Monthly increase in Saudi oil production.

§ 01 Executive Snapshot

What: Brent crude oil prices have dropped below $90/bbl amid renewed hopes for a ceasefire affecting energy flows through the Strait of Hormuz.
Who: ING analysts Warren Patterson and Ewa Manthey provide the analysis.
Why it matters: The potential for a fragile ceasefire and the dynamics of supply and demand could significantly impact oil prices, with projections suggesting a rise towards $120-130/bbl if flows do not resume by late July.

Brent has fallen below $90/bbl due to hopes for a ceasefire in the region.
A significant price increase towards $120-130/bbl is expected if oil flows are not resumed by late July due to tightening inventories and seasonal demand.
OPEC forecasts global oil demand growth just shy of 1 million barrels per day (b/d) YoY in 2026, revised down from 1.17 million b/d.
Saudi output increased by 157k b/d MoM, while the UAE and Iraq saw increases of 87k b/d and 75k b/d MoM, respectively.
Analysts express caution regarding the sustainability of the ceasefire and its impact on supply dynamics.

The current price fluctuations are influenced by geopolitical tensions and supply risks from the Persian Gulf, emphasizing the fragility of the energy market.
Recent output increases from Persian Gulf producers highlight a complex interplay of supply and geopolitical developments affecting global oil prices.

The immediate consequence of a potential ceasefire could stabilize oil prices, but failure to maintain it may lead to significant price hikes.
Long-term implications include a cautious outlook on demand growth forecasts and the ongoing volatility in the oil markets due to geopolitical factors.

Potential risk includes the fragility of the ceasefire, which could collapse if nuclear talks do not progress.
Competition from increasing supply from other Persian Gulf nations could impact pricing strategies and market stability.

Key timeline to watch is late July when the market could face an inflection point regarding inventory levels and seasonal demand.
Future developments in nuclear talks and the sustainability of the ceasefire will signal the success or failure of current market stability efforts.

§ 07

What has caused Brent crude oil prices to drop below $90/bbl?

Brent crude oil prices have dropped below $90/bbl amid renewed hopes for a ceasefire affecting energy flows through the Strait of Hormuz.

Why is there a projection for oil prices to rise towards $120-130/bbl?

A significant price increase is expected if oil flows are not resumed by late July due to tightening inventories and seasonal demand.

Who provided the analysis on the current oil price situation?

The analysis was provided by ING analysts Warren Patterson and Ewa Manthey.

When should we expect a potential inflection point in the oil market?

The key timeline to watch is late July when the market could face an inflection point regarding inventory levels and seasonal demand.