Brent drops to low $70s in fourth straight weekly loss as Hormuz flows return

Crude is back near pre-war levels. Brent is trading in the low $70s and WTI is below $70, both on track for a fourth straight weekly loss as oil starts moving through the Strait of Hormuz again. For US jobbers and haulers, cheaper crude feeds into cheaper diesel and gasoline down the line, so this is the run that helps your margins if it holds.

The calm is real. ICE Brent has stayed in a tight $71 to $73 band all week, partly on thin pre-holiday liquidity with US markets closed for July 4, and partly because traders have stopped jumping at every Iran headline. Three weeks ago the war premium was still in the price. Now it is mostly gone.

Citi's $60 call

Citigroup told clients to sell any summer rally and put Brent at $60 to $65 a barrel by year end. The bank expects Hormuz traffic to normalize and the US and Iran to turn their memorandum to negotiate into an actual deal over the coming months. If that plays out, wholesale costs could keep easing into fall. A forecast is not a fill, and Citi has been wrong before, but the direction matches what the tape is already doing.

Iraqi discounts

TotalEnergies is offering millions of barrels of Iraq's Basrah Medium and Basrah Heavy for prompt delivery to Asia this month and next. Iraq took a heavy hit from the Hormuz closure and is now moving crude on deep spot discounts, on a loading basis only, which means buyers have to secure their own empty tankers to get into the Gulf. Discounted Persian Gulf barrels moving to Asia loosen the global balance, and a looser balance keeps pressure on the crude US refiners buy.

The Russian refinery

A drone strike halted operations at one of Russia's key oil refineries. Lost refining capacity tightens product supply even when crude is soft, so it is worth watching whether this is a one-off or the start of a pattern. So far it has not shown up in US diesel, and with Russian product mostly sanctioned out of the US market anyway, the effect here is indirect.

What to watch

Whether the Hormuz reopening sticks and flows keep climbing back toward normal. Whether the US-Iran memorandum turns into a signed deal or falls apart, because a broken ceasefire would put the risk premium back into crude fast. And whether the Russian refinery outage stays contained or spreads to other sites. Crude could keep easing if the strait stays open and OPEC barrels keep flowing, but a failed deal would move it the other way in a hurry.