August WTI crude futures settled at $71.53 a barrel, down $3.99 or 5.28 percent for the week ending June 26, as supply fears faded. The contract swung between a high of $78.14 and a low of $68.90 before closing lower, with selling pressure persisting throughout the period.
Traders have shifted focus away from potential Persian Gulf supply disruptions, instead pricing in an expected increase in Iranian oil exports. The market is now betting that more crude will flow from the region, unwinding earlier risk premiums tied to Middle East tensions.
Saudi Arabia is expected to slash the official selling price of its flagship Arab Light crude loading for Asia in August by $6.50 to $8.00 per barrel, according to a Reuters survey of industry sources. The move follows the tentative reopening of the Strait of Hormuz, which has contributed to a crash in Middle East benchmarks.
Aramco, the world's largest crude exporter, is adjusting its pricing as regional supply concerns ease. The discount to Asia signals a return to competitive pricing amid rising output expectations from Iran and other Persian Gulf producers, reshaping near-term supply dynamics.
Counter-argument: Some analysts caution that the reopening of the Strait of Hormuz remains tentative, and any renewed geopolitical disruption could quickly reverse the price slide. Supply from Iran may also face infrastructure or regulatory bottlenecks that limit the actual volume reaching markets.