Snapshot: Brent crude has plunged below the psychological $80 a barrel mark, sliding over 3% to its lowest level since early March. The liquidation is entirely supply-driven, as traders aggressively price in a return of Iranian tanker traffic following a US-Iran ceasefire to reopen the Strait of Hormuz. An interim deal is expected to be signed in Switzerland this Friday, sealing a fourth consecutive session of heavy losses.
- With US emergency reserves sitting at their lowest level since 1983, the anticipated return of Middle East flows will rapidly ease physical market tightness and rebuild depleted global inventories.
- European G7 allies at the Évian-les-Bains summit are openly doubting the optimistic Friday timeline for reopening the strait, highlighting serious implementation risks that could trigger sudden short-covering.
Bias into NY: We hold a bearish bias targeting $78.50, as the structural shift in physical supply outweighs broader macro factors. Any minor support from a softer US Dollar Index at 119.5073 is secondary to this massive geopolitical supply shock.