Brent Is No Longer Needed. Forecast as of 24.06.2026

2026.06.24 2026.06.24
Brent Is No Longer Needed. Forecast as of 24.06.2026Dmitri Demidenkohttps://www.litefinance.org/blog/authors/dmitri-demidenko/Oil shipments through the Strait of Hormuz have quickly returned to normal after the conflict. With Gulf countries also ramping production back to pre-war levels, Brent prices are coming under pressure. Let’s explore the key factors and develop a trading strategy.The article covers the following subjects:Major TakeawaysDemand for oil in Asia is falling rapidly.The Persian Gulf is ramping up production.Oil transit through the Strait of Hormuz has resumed.If Brent fails to return to $79, short trades can be opened.Weekly Fundamental Forecast for OilSuddenly, oil seems to be out of favor. At the height of the Middle East crisis, Brent soared above $120 per barrel, and the global economy was bracing for the worst. Now, demand from Asia is weakening, Gulf producers are widening discounts on their crude grades, and the deepening contango in the derivatives market is a clear sign that the market has turned bearish.Demand Structure for Oil Transported Through the Strait of HormuzSource: Bloomberg.Man proposes, God disposes. During the Middle East conflict, many argued that Brent would not return to pre-war levels until the end of 2026. Damage to infrastructure across the Gulf was expected to take time to repair, while tanker owners were likely to remain extremely cautious given the fragile truce between the US and Iran. As it turned out, things played out very differently.The UAE has restored production to 85% of its February output in a matter of days. Iraq is pushing its producers to raise output to 3 million bpd as quickly as possible, while Kuwait has lifted all production restrictions. Iran, meanwhile, is seeking to expand oil sales beyond China after receiving a 60-day US waiver allowing unrestricted exports and dollar-denominated transactions.The reopening of the Strait of Hormuz has proven far more significant than many expected. The US military reported transit volumes of 17 million bpd over the weekend, Donald Trump put the figure at 19 million bpd on social media, while Bloomberg’s estimates point to 20 million bpd. What caution are we talking about?Composition of China’s Oil Import ShortfallSource: Bloomberg.Oil supply is rising rapidly, while demand in Asia is moving in the opposite direction. China cut its oil imports by 3.3 million bpd in Q2. In February, imports stood at 12.6 million bpd, providing strong support for Brent prices. During the Middle East conflict, lower Chinese consumption helped prevent prices from climbing further. Now, the market is increasingly questioning whether demand will ever return to pre-war levels as the shift away from gasoline and diesel gathers pace.The oil market is increasingly resembling the surplus-driven environment seen at the start of the year, paving the way for a rapid rebuilding of global inventories. Against this backdrop, speculators have expanded their net short positions in Brent to the highest level in six months, driving futures prices back to pre-war levels much sooner than investors had expected. When will Brent hit bottom? Probably when the last bull gives up.Weekly Trading Plan for BrentUnless the conflict in the Middle East escalates, Brent is likely to continue its bearish trend. If oil fails to rise above $79 per barrel in the coming days, one may consider short trades, targeting $70.5 and $64.5.This forecast is based on the analysis of fundamental factors, including official statements from financial institutions and regulators, various geopolitical and economic developments, and statistical data. Historical market data are also considered.Price chart of UKBRENT in real time modeThe content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteFinance broker. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2014/65/EU.

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