Brent crude is holding near $73; why is the market refusing to price in panic?
2026-06-29 22:04:00
On Monday, June 29, the pricing core of the energy market returned to the Strait of Hormuz. Brent crude oil traded at $73.30 per barrel, still significantly below its monthly high, but the risk premium following the weekend clashes between the US and Iran had not completely disappeared. Ship tracking data also showed that visible passage through the Strait of Hormuz dropped to 22 vessels last Sunday, and a total of 108 vessels from Friday to Sunday, indicating that the resumption of shipping does not equate to the disappearance of risk.
The most crucial change in this market cycle wasn't the one-sided surge in oil prices due to the attacks, but rather Brent crude's repeated digestion of the news around $73 per barrel. Traders were truly pricing in three layers of risk: first, whether the attacks would disrupt physical shipping; second, whether ship owners and crews were willing to restore passage; and third, whether negotiations could translate a temporary ceasefire into stable shipping rules. The current market response leans towards caution; a risk premium exists, but it hasn't yet been perceived by the market as a structural supply disruption.
The reason is that some ships are still transiting the strait, and the attack did not cause large-scale casualties or prolonged disruptions. Compared to crude oil prices themselves, shipping insurance, freight rates, the number of available tankers, and loading port queue times better reflect the true pressure. If empty ships cannot enter the Gulf to load cargo, even if export terminals recover, the release of supply will be weakened by logistical bottlenecks.
The Strait of Hormuz is not an ordinary shipping route. In 2024, approximately 20 million barrels of oil flowed through the strait per day, equivalent to about 20% of global liquid oil consumption; meanwhile, about one-fifth of global liquefied natural gas trade also passed through this passage. In other words, any institutional fees, escort route disputes, or changes in passage permits in the region will directly alter the time and risk costs of energy trade.
Alternative routes exist, but their flexibility is limited. Some oil-producing countries possess bypass pipelines that can buffer short-term disruptions, but their available capacity cannot fully cover the scale of passage through the Hormuz. For the market, this means prices depend not only on "whether ships pass," but also on "how many ships dare to pass, when they pass, and at what cost." As long as shipowners' risk appetite cannot recover to pre-conflict levels, spot discounts, monthly spread structures, and inter-regional price differentials will be repeatedly disrupted.
The US stated that Iran requested a meeting and that the talks would be held in Doha, Qatar; however, Iranian Deputy Foreign Minister Gharibabadi indicated that no technical working group meeting was scheduled for this week, and the time and location would be determined later when conditions were ripe. This discrepancy in statements from both sides means that the market cannot simply interpret "resumption of negotiations" as "rules being finalized."
A deeper conflict lies in the issue of strait management rights and potential toll arrangements. US Secretary of State Rubio recently stated that international waterways should not be subject to tolls by any country; Iranian Foreign Minister Araqchi emphasized that external interference would complicate and delay the reopening of the strait. These statements indicate that the dispute has expanded from a ceasefire to the framework for future waterway governance.
This means for traders that geopolitical news is no longer just a sudden risk, but will become part of freight rates, insurance premiums, and inventory levels. Oil prices may be less sensitive to individual attacks, but more sensitive to institutional costs of passage.
The current crude oil market is not lacking in risk events, but rather in evidence of sustained supply disruptions. As long as visible shipping traffic is not completely cut off, price reactions to conflict news will increasingly emphasize sustainability rather than emotional shocks. The pullback in Brent crude from its highs reflects that the market is removing the "worst-case scenario" from its baseline assumptions, but has not eliminated tail risks.
The main variables going forward are concentrated in three areas: whether the negotiations result in enforceable navigation rules, whether shipowners restore normal transponder passage, and whether queues at Gulf loading terminals worsen. If all three improve simultaneously, the risk premium will continue to be compressed; if merchant ships are attacked again or toll disputes escalate, the market will re-inflate supply chain discounts. Current prices are more of a reflection of "temporary stabilization" than a confirmation of "risk over."
The fact that oil prices haven't spiraled out of control indicates that the market is re-fractionating risks.
The most crucial change in this market cycle wasn't the one-sided surge in oil prices due to the attacks, but rather Brent crude's repeated digestion of the news around $73 per barrel. Traders were truly pricing in three layers of risk: first, whether the attacks would disrupt physical shipping; second, whether ship owners and crews were willing to restore passage; and third, whether negotiations could translate a temporary ceasefire into stable shipping rules. The current market response leans towards caution; a risk premium exists, but it hasn't yet been perceived by the market as a structural supply disruption.
The reason is that some ships are still transiting the strait, and the attack did not cause large-scale casualties or prolonged disruptions. Compared to crude oil prices themselves, shipping insurance, freight rates, the number of available tankers, and loading port queue times better reflect the true pressure. If empty ships cannot enter the Gulf to load cargo, even if export terminals recover, the release of supply will be weakened by logistical bottlenecks.
The value of the Hormuz lies not in its media attention, but in its global supply resilience.
The Strait of Hormuz is not an ordinary shipping route. In 2024, approximately 20 million barrels of oil flowed through the strait per day, equivalent to about 20% of global liquid oil consumption; meanwhile, about one-fifth of global liquefied natural gas trade also passed through this passage. In other words, any institutional fees, escort route disputes, or changes in passage permits in the region will directly alter the time and risk costs of energy trade.
Alternative routes exist, but their flexibility is limited. Some oil-producing countries possess bypass pipelines that can buffer short-term disruptions, but their available capacity cannot fully cover the scale of passage through the Hormuz. For the market, this means prices depend not only on "whether ships pass," but also on "how many ships dare to pass, when they pass, and at what cost." As long as shipowners' risk appetite cannot recover to pre-conflict levels, spot discounts, monthly spread structures, and inter-regional price differentials will be repeatedly disrupted.
The disagreement over negotiating terms is currently the biggest hidden source of instability.
The US stated that Iran requested a meeting and that the talks would be held in Doha, Qatar; however, Iranian Deputy Foreign Minister Gharibabadi indicated that no technical working group meeting was scheduled for this week, and the time and location would be determined later when conditions were ripe. This discrepancy in statements from both sides means that the market cannot simply interpret "resumption of negotiations" as "rules being finalized."
A deeper conflict lies in the issue of strait management rights and potential toll arrangements. US Secretary of State Rubio recently stated that international waterways should not be subject to tolls by any country; Iranian Foreign Minister Araqchi emphasized that external interference would complicate and delay the reopening of the strait. These statements indicate that the dispute has expanded from a ceasefire to the framework for future waterway governance.
This means for traders that geopolitical news is no longer just a sudden risk, but will become part of freight rates, insurance premiums, and inventory levels. Oil prices may be less sensitive to individual attacks, but more sensitive to institutional costs of passage.
Fundamental pressures remain, limiting the upside potential for oil prices.
The current crude oil market is not lacking in risk events, but rather in evidence of sustained supply disruptions. As long as visible shipping traffic is not completely cut off, price reactions to conflict news will increasingly emphasize sustainability rather than emotional shocks. The pullback in Brent crude from its highs reflects that the market is removing the "worst-case scenario" from its baseline assumptions, but has not eliminated tail risks.
The main variables going forward are concentrated in three areas: whether the negotiations result in enforceable navigation rules, whether shipowners restore normal transponder passage, and whether queues at Gulf loading terminals worsen. If all three improve simultaneously, the risk premium will continue to be compressed; if merchant ships are attacked again or toll disputes escalate, the market will re-inflate supply chain discounts. Current prices are more of a reflection of "temporary stabilization" than a confirmation of "risk over."
- Risk Warning and Disclaimer
- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
