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The Hormuz Shock Reaches Signing Distance as Oil Falls Below $90

The crisis that has framed this series since CERAWeek moved to the edge of resolution in mid-June. After a brief military escalation, Trump canceled further strikes and said a peace deal was close. Oil fell to its lowest level since March. OPEC+ approved a fourth output increase. The shock is unwinding in real prices, not just in forecasts.

Jun 13, 2026 · 5 min read

Summary

The Strait of Hormuz crisis that has defined the energy story since February entered a possible endgame during this window. A renewed escalation in early June, including US strikes and an Iranian declaration that the strait was closed to all traffic, was followed on June 11 by Trump canceling further strikes and saying a peace deal would be announced soon. By June 12, Iran’s foreign minister confirmed a memorandum of understanding existed but said it was unsigned and could still change, with reports pointing to a possible signing around June 14 in Geneva. Oil fell sharply on the de-escalation. Brent settled near $87 on June 12, the lowest since early March. OPEC+ approved its fourth output increase since the closure.

Deal Status as of June 13

The deal is unsigned, described as imminent, and disputed on terms.

The US blockade lifting and Iranian mine clearance are deal terms that have not yet been executed. The strait remained effectively closed as of June 13, with traders pricing the probability of reopening rather than an accomplished reopening.

Oil Price Trajectory

The in-window move was large and well documented.

The official base case still lagged the market. The EIA June Short-Term Energy Outlook modeled Brent averaging around $105 in June and July under a continued-closure assumption, well above where the market traded as deal odds rose. June 2026 Short-Term Energy Outlook - U.S. EIA

The path: about $98 on May 23, a rebound to $98 to $99 in early June, then $87 on June 12. This tracks toward the $70 to $85 downside case for a confirmed reopening that we flagged in Episode 5.

OPEC+ and the UAE

At its June 7 meeting, the OPEC+ core approved a fourth quota increase since the Hormuz closure, adding 188,000 barrels per day from July. Saudi Arabia and Russia each took about 62,000 barrels per day, lifting required output to roughly 10.291 million barrels per day for Saudi Arabia and 9.762 million for Russia. This was the group’s first meeting since the UAE formally exited on May 1, and the communiqué did not address the exit. OPEC+ approves fourth oil output quota hike since Hormuz closure - CNBC

The UAE made no new in-window expansion announcement. Its acceleration toward 5 million barrels per day of capacity remains the path set out in early May.

Conclusions

The shock that started this series is ending in fact, not just in forecast. Episode 5 argued the macro overlay could unwind while the physical buildout did not. This window made the first half of that prediction concrete. Oil is below $90 and falling, a deal is at signing distance, and OPEC+ keeps adding barrels into a market that can soon ship them. The energy-security framing that gave the AI power story its urgency through Episodes 2 to 5 is dissolving.

What does not change is the physical and now political constraint on the buildout. A calmer Gulf lowers oil prices. It does not shorten a transformer lead time, clear an interconnection queue, or settle who pays for the grid. The relevance of the oil price to the AI power story is fading, which is itself the development.

Our Thinking

The signing is the near-term binary. A signed deal pushes Brent toward the low $80s or below and closes the founding crisis of the series. A collapse, following the Islamabad pattern, re-spikes prices and extends the squeeze. Either way, the AI power thesis no longer rests on it. That decoupling is the reason this cycle’s headline is about the buildout detaching from the systems that used to govern it, rather than about the deal itself.

Watch

  • Whether the MOU is signed around June 14 in Geneva, and on whose terms regarding Hormuz governance and transit fees.
  • Brent and WTI action on signing or collapse.
  • Saudi and UAE production response once the strait reopens.
  • OPEC+ capacity review and 2027 baseline setting.
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The Hormuz Shock Reaches Signing Distance as Oil Falls Below $90

The crisis that has framed this series since CERAWeek moved to the edge of resolution in mid-June. After a brief military escalation, Trump canceled further strikes and said a peace deal was close. Oil fell to its lowest level since March. OPEC+ approved a fourth output increase. The shock is unwinding in real prices, not just in forecasts.

Jun 13, 2026 · 5 min read

Summary

The Strait of Hormuz crisis that has defined the energy story since February entered a possible endgame during this window. A renewed escalation in early June, including US strikes and an Iranian declaration that the strait was closed to all traffic, was followed on June 11 by Trump canceling further strikes and saying a peace deal would be announced soon. By June 12, Iran’s foreign minister confirmed a memorandum of understanding existed but said it was unsigned and could still change, with reports pointing to a possible signing around June 14 in Geneva. Oil fell sharply on the de-escalation. Brent settled near $87 on June 12, the lowest since early March. OPEC+ approved its fourth output increase since the closure.

Deal Status as of June 13

The deal is unsigned, described as imminent, and disputed on terms.

The US blockade lifting and Iranian mine clearance are deal terms that have not yet been executed. The strait remained effectively closed as of June 13, with traders pricing the probability of reopening rather than an accomplished reopening.

Oil Price Trajectory

The in-window move was large and well documented.

The official base case still lagged the market. The EIA June Short-Term Energy Outlook modeled Brent averaging around $105 in June and July under a continued-closure assumption, well above where the market traded as deal odds rose. June 2026 Short-Term Energy Outlook - U.S. EIA

The path: about $98 on May 23, a rebound to $98 to $99 in early June, then $87 on June 12. This tracks toward the $70 to $85 downside case for a confirmed reopening that we flagged in Episode 5.

OPEC+ and the UAE

At its June 7 meeting, the OPEC+ core approved a fourth quota increase since the Hormuz closure, adding 188,000 barrels per day from July. Saudi Arabia and Russia each took about 62,000 barrels per day, lifting required output to roughly 10.291 million barrels per day for Saudi Arabia and 9.762 million for Russia. This was the group’s first meeting since the UAE formally exited on May 1, and the communiqué did not address the exit. OPEC+ approves fourth oil output quota hike since Hormuz closure - CNBC

The UAE made no new in-window expansion announcement. Its acceleration toward 5 million barrels per day of capacity remains the path set out in early May.

Conclusions

The shock that started this series is ending in fact, not just in forecast. Episode 5 argued the macro overlay could unwind while the physical buildout did not. This window made the first half of that prediction concrete. Oil is below $90 and falling, a deal is at signing distance, and OPEC+ keeps adding barrels into a market that can soon ship them. The energy-security framing that gave the AI power story its urgency through Episodes 2 to 5 is dissolving.

What does not change is the physical and now political constraint on the buildout. A calmer Gulf lowers oil prices. It does not shorten a transformer lead time, clear an interconnection queue, or settle who pays for the grid. The relevance of the oil price to the AI power story is fading, which is itself the development.

Our Thinking

The signing is the near-term binary. A signed deal pushes Brent toward the low $80s or below and closes the founding crisis of the series. A collapse, following the Islamabad pattern, re-spikes prices and extends the squeeze. Either way, the AI power thesis no longer rests on it. That decoupling is the reason this cycle’s headline is about the buildout detaching from the systems that used to govern it, rather than about the deal itself.

Watch