The fastest narrative reversal of the crisis happened inside a single Thursday. The day opened with the IRGC formally declaring the Strait of Hormuz “closed to all vessels” and a second round of US strikes on radar and air-defense sites at Bandar Abbas, Qeshm, Jask and Sirik. It closed with President Trump calling off the strikes planned for Thursday night and telling reporters the US had “made a great settlement of the war with Iran” that is “subject to finalization of documents.” By Friday morning the framing had hardened: a deal — reopening Hormuz plus Iranian commitments to forgo nuclear weapons — could be signed as early as this weekend, likely in Europe. Iran’s semi-official Fars agency reports Tehran is likely to accept; no final text has been approved by either side. The whiplash bookends deserve recording: days before announcing the settlement, Trump had threatened to “take” Kharg Island, Iran’s main oil-export terminal, and warned the US could target Iran’s oil infrastructure. The closure decree itself remains nominally in force while documents are finalized — the strait is as shut this morning as it was Wednesday.
Crude erased the week’s entire escalation premium in roughly 24 hours. Brent settled $90.38 Thursday (−2.9%), fell to $89.15 in extended trading (−4.2% from Wednesday at the lows), and trades near $89 Friday — the lowest in nearly two months; WTI settled $87.71 and trades toward $86, the lowest since April. The week’s path — $98 intraday Monday, $88.20 Tuesday, $95.45 Thursday morning, $89 Friday — is the cleanest demonstration yet that the marginal dollar in this market is diplomatic, not physical. Traders kept one foot on the ground: as TradingEconomics noted, even a breakthrough faces obstacles before flows normalize — clearing mines from the strait, restarting idled production, and repairing facilities damaged by three-plus months of drone and missile exchanges. A signature starts the clock on normalization; it does not stop the shortage.
The demand side moved under the market’s feet this week, and it is arguably the bigger long-run story. The EIA’s June Short-Term Energy Outlook now forecasts global oil demand falling 1.1 million b/d in 2026 — against +0.2 expected just last month and +1.2 in February. The agency cites fuel-use-reduction initiatives, shortages, and curtailed product exports, concentrated in Asia, the region most dependent on Gulf crude. The US has become the swing supplier of record: net distillate exports are forecast up 27% year-on-year in Q2, jet-fuel net exports run ~0.3 mb/d, and US crude imports have fallen to their lowest since February 2021. Read together with Wednesday’s WPSR (a seventh consecutive crude draw; inventories including the SPR down 79 million barrels since February 28), the picture is a market drawing down stocks into demand that is structurally shrinking — which is why a reopened Hormuz returns to a smaller market than the one that closed, and why producer revenues and refining margins can reprice down even as physical supply normalizes.
On the shortage map — 19 active + 18 watch across 32 countries, unchanged in count but not in content. Ecuador’s band increase is confirmed, effective today: Extra and Ecopaís rise $0.148 to $3.31/gal (the +5% monthly cap), diesel rises the same, and free-market Super now exceeds $5.60/gal; the projected premium-diesel subsidy jumped 20.9% in a month to $1.93/gal, with Ecuador now three months without producing premium diesel domestically (Esmeraldas at ~40% capacity). Kenya’s pricing cycle expires Sunday June 14, and the next EPRA review prices in cargoes landed at Mombasa during the worst of the crisis — a fresh increase is the base case, landing the same weekend as the possible deal signing; underneath sits a country with no strategic petroleum reserve, 21-day commercial stocks, and a kerosene price held down only by a strained stabilization fund. Australia’s aviation pin stays red with a corrected basis: Hamilton Island–Melbourne (to Jun 29), Darwin–Gold Coast (to Oct 12) and the rerouted Perth–London nonstop carry the fuel-driven rating, while Adelaide–Mount Gambier is now correctly recorded as demand-attributed (Qantas cites sub-20% loads, with fuel secondary) — and the forward cliff is July 1, when the Qantas 81% fuel hedge and Australia’s excise cut expire together. The new-location hunt cleared three candidates without pinning them: Zimbabwe (government and NOIC assert supply adequacy; the stress is price, not physical), Nigeria (structural diesel-import dependence and April jet-fuel surcharges, but no fresh June evidence of physical scarcity), and Tuvalu (an April state of emergency on Funafuti that expired without re-confirmation). Recording the negatives is part of the method — a map you can trust is one that shows its work on what it left off.
Forward calendar: the possible signing this weekend; Kenya’s new EPRA schedule Sunday-Monday; Melbourne–Coffs Harbour’s suspension window ends June 14 (a restart would be the first route restoration of the crisis); GlobalPetrolPrices and IATA jet prints Monday; the EU pipeline-gas ban takes effect June 17; EIA WPSR Wednesday June 17; and the July 1 double cliff in Australia. For the matrix and analyst outlook, see the Risk Analysis page.