- OPEC+ Set to Boost Supply as Israel-Iran Conflict Eases.
- Freight Rates Spike Before Ceasefire, Hit 2025 Highs.
- Strait of Hormuz Remains Volatile Despite Truce.
Concerns about possible disruptions to commodity flows from the Persian Gulf began to ease on June 24, following a signal from US President Donald Trump that a ceasefire between Israel and Iran had been reached. Iranian state television confirmed this news, stating that a ceasefire has been imposed, reports S&P Global.
Oil Prices Reflect Waning Risk Premium
Oil prices had surged with a $5-$10 “fear premium” amid escalating conflict in the region. According to Jim Burkhard, vice president and head of research for oil markets at S&P Global Commodity Insights, “We expect OPEC+ members in the Gulf to continue with the accelerated unwinding of production cuts, which will add more oil to the global market next month and beyond.”
Dated Brent, assessed by Platts (part of S&P Global Commodity Insights), had risen 18% since May before tensions began easing after Iran’s retaliatory strike on a US military base in Qatar on June 23.
Freight Rates Soar to 2025 High Amid Ongoing Conflict
After the US bombed Iranian nuclear facilities, freight rates on major routes from the Persian Gulf to North Asia skyrocketed on June 23. Data from Platts shows that delivery rates to Japan hit a record high for 2025, reaching w225.
The benchmark route for VLCCs from the Persian Gulf to China also saw a dramatic increase overnight, jumping to w87.5, a notable rise from the w40 level it had been struggling to maintain before Israel’s strike on Iran on June 12.
Caution Persists in the Strait of Hormuz
Despite the ceasefire, shipping companies remain cautious. A spokesperson for Japan’s Mitsui O.S.K. Lines, one of the largest global ship operators, stated on June 24: “The company remains vigilant during its ships’ transit through the Strait of Hormuz with its maximized operational efforts to minimize the ships’ stay in the Persian Gulf.”
Since June 12, the Strait of Hormuz has become a focal point for shipping, especially with the escalation of the conflict between Israel and Iran. Approximately 20% of the world’s oil and LNG flows through this strait every day, making it a vital channel for global energy supplies. Tehran had previously warned that it might disrupt shipping in the strait in retaliation for US military actions over the weekend.
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Source: S&P Global
