Brent Crude Oil Price Falls to Seven-Week Low on Iran-Israel Ceasefire

Brent crude oil price fell about 3% to a seven-week low on Tuesday after Iran and Israel said they had halted attacks on each other following a request from U.S. President Donald Trump. The drop pushed Brent below its 100-day moving average of technical support for the first time since January, a backdrop against which the U.S. Energy Information Administration released a forecast cutting 2026 world oil demand by 1.1 million barrels a day from 2025. Iran’s block of the Strait of Hormuz remains in force, the EIA says OECD inventories are heading for their lowest level since 2003, and China reported its weakest crude imports in eight years.

The Ceasefire Trade

Brent futures fell $2.80, or 3.0%, to settle at $91.45 a barrel. U.S. West Texas Intermediate (WTI) crude slid $3.10, or 3.4%, to settle at $88.20. It was the lowest settlement for Brent since April 17 and for WTI since May 29, and the first time since January that Brent closed below its 100-day moving average of technical support.

The trade has been sharp and one-directional since Monday, when Israel and Iran halted direct attacks on each other after Trump urged them to stop. Tehran has said it will resume hostilities if Israel continues to attack the Hezbollah militia in Lebanon, and Iran has so far held back from attacking, even though Israel struck the historic port city of Tyre in southern Lebanon on Tuesday, killing at least eight people. The slide reverses the prior week’s push in Brent to $97, when Iran said it would cut contact with U.S. negotiators and pursue a “complete closure” of the strait.

The oil market is drafting lower … as the latest shooting match between Israel and Iran was [defused] in favor of a ceasefire and as Trump continues to talk the market lower by suggesting that an end of the war with Iran could be reached in 2-3 days with negotiations in their final stages.

Analysts at energy advisory firm Ritterbusch and Associates wrote in a note on Tuesday.

Trump’s Helicopter Claim Briefly Stops the Slide

Brent and WTI bounced off session lows after Trump said on Tuesday that Iran had shot down a U.S. helicopter in the Strait of Hormuz and warned that Washington would respond. The claim, made in a social media post, knocked the price floor back in for roughly an hour of trading. The bounce proved short-lived as traders focused on growing expectations that negotiations aimed at ending the conflict could advance in the coming days.

U.S. Army pilots from the downed aircraft were rescued, according to U.S. Central Command, which described the operation as a routine patrol. The bounce reversed within hours. By mid-afternoon in New York, the EIA had released its revised demand forecast, and the IEA had published its own downward revision the month before. The helicopter claim did not derail the broader ceasefire trade.

The strait at the center of Tuesday’s price action is the same one the U.S. Energy Information Administration now assumes will stay “effectively closed” into early summer, with flows slowly resuming in the third quarter. The agency’s revised demand forecast, released the same day, will be parsed by traders through Wednesday’s session.

An Eight-Year Low in China’s Crude Imports

China’s crude oil imports slumped 29% in May to their lowest level in eight years, extending a sharp decline in the world’s largest oil importer that is helping keep a lid on global oil prices. Beijing’s customs administration reported the figures on Monday, attributing the drop to refinery run cuts and price-driven demand destruction.

Across Asia, refiners in India, Japan, and South Korea have also pulled back throughput, a pullback visible in India’s E85 ethanol launch under the Hormuz crisis. The IEA warned in May that the contraction would spread beyond the Middle East. Most of the demand destruction is concentrated in Asia, the region that receives the largest share of Middle Eastern crude.

• 1.1 million bpd: EIA’s cut to its 2026 global oil demand forecast, the largest single-month revision in a year.
• 11.3 million bpd: Persian Gulf production shut-in averaged in May, the EIA says.
• 50 days: the days-of-supply cover expected for OECD inventories by the end of 2026, the lowest since January 2003.
• $79/b: the average Brent price the EIA now forecasts for 2027.

The EIA Cuts Its 2026 Demand Forecast, Again

The U.S. Energy Information Administration, in its latest U.S. energy outlook, now forecasts that global oil demand will decrease by an average of 1.1 million barrels a day in 2026, compared with its expectation last month for 0.2 million barrels a day of growth and its February forecast for 1.2 million barrels a day of growth. The cut is concentrated in Asia, the agency says.

High fuel prices, reduced fuel availability, and government fuel-saving initiatives have all played a role, the EIA says. China, India, Japan, and South Korea are the most visible demand casualties, with refinery run cuts and government initiatives accelerating the decline. The IEA, in its May 13 oil market report, forecast a smaller 420,000 bpd contraction for 2026. Both agencies point to Asia as the locus of the demand hit.

World oil demand is now expected to drop year-on-year in 2026, the agency says, against a 2025 record. The agency expects Brent to average $89 a barrel by the fourth quarter of 2026 and $79 a barrel in 2027, both well below the wartime peak above $100 a barrel. The price outlook assumes the strait reopens slowly through the third quarter and trade flows normalize over the following 12 months.

Source: U.S. Energy Information Administration, short-term energy outlook.

OECD Stockpiles Are Falling to 2003 Lows

The arithmetic of the demand cut lands in the OECD’s storage tanks. With world production now projected at 99.0 million barrels a day in 2026, down from a record 106.1 million in 2025, the EIA says countries will pull any barrels they need from storage. The result, in the agency’s forecast, is OECD inventories falling to just under 2.3 billion barrels by December 2026, the lowest level since 2003, when the EIA’s dataset began.

Days-of-supply cover tells the same story. The EIA expects OECD inventories to fall to 50 days by the end of 2026, the fewest days of future demand cover since January 2003 and well below the 70-plus days the agency forecast in February. The U.S. picture is part of the same drawdown: analysts estimated energy firms pulled 4.0 million barrels of crude from U.S. storage during the week ended June 5, which would mark the seventh consecutive weekly decline. Inventories declined by 3.6 million barrels in the same week last year.

The Strait That Won’t Open

Iran continues to block most shipping through the Strait of Hormuz, which before the war carried a fifth of the world’s crude oil and liquefied natural gas. Washington has imposed its own blockade of Iranian ports.

U.S. Energy Secretary Chris Wright said on Tuesday that ship traffic in the Gulf and oil exports through the strait are rising, even as Washington and Tehran struggle to reach a deal on ending their more than three-month-old war. The EIA’s own forecast assumes the strait will remain effectively closed into early summer, with flows slowly starting to resume in the third quarter of 2026.

If flows resume within that timeframe, the agency says it will take until early 2027 for production and trade patterns to generally return to pre-conflict status. The agency also anticipates that some Persian Gulf producers will not bring output back to pre-conflict levels during the STEO forecast period.

With the strait still mostly closed and Persian Gulf production limited, the world is drawing down the inventory cushion the agency says is heading toward its lowest level since 2003. With a record close in U.S. stocks as the Hormuz oil threat built still fresh in traders’ minds, the next major data point will be the EIA’s updated flow assumption.

Frequently Asked Questions

Why did oil prices fall to a seven-week low on June 9, 2026?

Iran and Israel announced on Monday, June 8, that they had halted direct attacks on each other after U.S. President Donald Trump urged them to stop. Brent settled down 3.0% at $91.45 a barrel, with WTI down 3.4% at $88.20, in the session after the announcement.

What did the EIA forecast for 2026 global oil demand?

In its latest short-term energy outlook, the EIA cut its 2026 global oil demand forecast by 1.1 million barrels a day, now expecting world demand to fall to 102.9 million barrels a day from a record 104.0 million in 2025. The agency said the cut was driven by high prices, reduced fuel availability, and government fuel-saving initiatives, with most of the reduction in Asia.

Will the Iran-Israel ceasefire hold?

Tehran has said it will resume hostilities if Israel continues to attack Hezbollah in Lebanon. Israel struck the historic port city of Tyre in southern Lebanon on Tuesday, killing at least eight people, and Iran has so far held back from responding. Ritterbusch and Associates said on Tuesday that negotiations in their final stages could produce a deal in two to three days, while the EIA’s forecast is built on the assumption that the strait remains effectively closed into early summer.

Is the Strait of Hormuz still closed?

Iran continues to block most shipping through the strait, and Washington has imposed its own blockade of Iranian ports. The EIA assumes the strait will remain effectively closed into early summer, with flows slowly resuming in the third quarter of 2026. U.S. Energy Secretary Chris Wright said on Tuesday that traffic and exports are rising, but the agency does not expect pre-conflict production and trade patterns to fully return until early 2027.

What does the EIA expect for Brent crude prices through 2026 and 2027?

The EIA forecasts Brent will average $89 a barrel in the fourth quarter of 2026 and $79 a barrel in 2027, down from a wartime peak above $100 a barrel. The agency expects prices to remain elevated until global oil flows return to normal levels and OECD inventories are replenished.