Oil prices rise before long U.S. holiday weekend

Highlights

WTI crude futures rose 0.45% to $69.00 a barrel.
Brent futures rose 0.57% to $72.21 a barrel.
This move followed a decline in the previous session to prewar levels.
Citi expects Brent to reach $60 to $65 by year-end as Hormuz flows recover.

WTI crude futures for August 2026 traded at $69.00 a barrel, up 0.45%, while Brent futures for September 2026 stood at $72.21, up 0.57%. At the same time, Citi expects Brent crude to approach $60 to $65 a barrel by the end of the year as shipping through the Strait of Hormuz normalizes and physical oil markets weaken, Bloomberg reported.

Prices recover after a sharp pullback

The rise came after Brent and WTI crude prices fell in the previous session to their lowest levels since the U.S.-Iran conflict began in late February. Thursday’s decline removed a significant part of the risk premium that had been priced in when traders feared broader disruptions to energy exports from the Persian Gulf.

Friday’s trading was also shaped by the U.S. market calendar. With U.S. markets closed ahead of the Independence Day holiday weekend, lower liquidity made crude more sensitive to position adjustments. In that context, the rise looked less like a fresh rally and more like a rebound after a steep fall.

Diplomacy remains part of the price equation. Washington and Tehran have agreed to a memorandum of understanding to pause hostilities while they work toward a longer-term arrangement. That has reduced immediate fears of a wider conflict, but it has also weakened the case for higher prices driven by supply-risk concerns.

Hormuz flows change the market balance

The main reason forecasts have turned more cautious is supply. Tanker traffic through the Strait of Hormuz has been recovering after the route reopened, allowing Gulf producers to restore shipments. Saudi Arabia has increased deliveries close to levels seen before the conflict, adding more barrels back into the market.

The Strait of Hormuz is one of the most important energy corridors in the world. When it was disrupted, prices reflected the risk that refiners could lose access to key Gulf supplies. As shipping lanes reopen, insurance markets adapt, and logistical bottlenecks ease, traders are shifting focus back to supply, demand, and inventories.

Citi analysts said fundamentals are recovering quickly, with seaborne flows normalizing, Chinese buyers still largely absent, and physical crude markets weakening. Goldman Sachs has also warned that the market could move back toward surplus as the effects of the Iran conflict fade. Morgan Stanley has cut its oil price forecasts in recent weeks, citing oversupply risks.

A market moving back to fundamentals

The important shift is that oil is no longer trading mainly on fear of a prolonged Gulf supply shock. Prices rose Friday, but the underlying market story is about the removal of the conflict premium.

For energy traders, the question is now whether demand can absorb the returning barrels. If Gulf exports continue to recover and Chinese buying remains weak, Brent may struggle to hold above the low $70s. Citi’s $60 to $65 year-end forecast reflects that change: the market is moving away from emergency pricing and back toward supply-demand fundamentals.

Earlier, we reported that the IEA warns of weaker oil demand and supply surplus by 2027.

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