The Strait of Hormuz reopens, crude oil supply soars, and Trump makes it clear that he will "not accept any shipping fees."

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After the reopening of the Strait of Hormuz, the global crude oil market is undergoing a rapid reversal of supply and demand. Brent crude benchmark prices fell below $75 a barrel this week, touching this level for the first time since the outbreak of the Iran war. From Europe to Asia, buyers are being inundated with offers, and the market, which was extremely tight months ago, is quickly sliding towards the edge of oversupply.

Meanwhile, according to CCTV News, on June 24 local time, U.S. President Trump stated that if the final U.S.-Iran deal includes any form of fees for shipping or maritime activities, it is "unacceptable" to him. This is his most explicit statement on the issue to date.

Supply Flood: From Extreme Tightness to Excess Supply

During the U.S.-Iran conflict, the Strait of Hormuz was effectively in a state of blockade. But according to Bloomberg, even before a formal U.S.-Iran agreement, large amounts of crude oil began quietly entering the market—UAE and Kuwaiti tankers crossed the strait using "dark ship" methods, and the International Energy Agency (IEA) estimates UAE’s oil exports had already recovered to nearly 85% of pre-war levels in early June before the agreement was signed.

After the agreement was signed, trapped oil was released faster. According to reports, before the U.S. granted a 60-day sales license, Iran shipped 30 million barrels of crude to Asia; Saudi tanker giant Bahri and other previously non-crossing companies busily moved backlog tankers out of the Strait. In recent weeks, the UAE sold about 60 million barrels of Persian Gulf crude via a series of tenders, continuously depressing Middle East oil prices.

The sudden increase in supply is looking for new outlets. Previously, at least six supertankers—carrying a total of 12 million barrels of UAE and Omani crude—are expected to arrive in Europe next month, though these cargoes would normally head to Asia. Nigeria’s Dangote refinery has also purchased UAE crude for the first time, reflecting supply expansion opening new markets.

Oil Price Signals: Market Turns Bearish

Price signals clearly point to oversupply.

Since mid-month, Middle Eastern crude oil has entered a contango structure—meaning near-month prices are lower than far-month prices, a classic signal the market judges supply is ample. The global Brent benchmark showed the same shift this week.

Daan Struyven, co-head of Global Commodity Research at Goldman Sachs, explained in a Bloomberg TV interview: “Due to weak Asian demand for Middle East crude, buying a barrel today is actually cheaper than buying one tomorrow. The reopening is progressing smoothly—and quickly.”

The drop in Angolan crude oil stands out particularly. This medium crude, typically purchased by China in large quantities, saw its discount reach the largest in over a decade, at one point nearly $10/barrel lower than global Brent.

June Goh, senior oil analyst at Sparta Commodities, said: “Asia’s refiners have enough supply booked through August, and the spot barrels released from the Hormuz Strait will further fuel the surplus.”

In retrospect, in early April this year, the world’s most important physical crude benchmark, Dated Brent, once broke through $140/barrel to a record high, as global buyers panic-bought amid the shock of war. Now, the same indicator has almost halved from the peak, falling back to near pre-war levels.

Inventory Risks: Low Reserves Leave Market Vulnerable

Behind the supply glut, there are risks that cannot be ignored.

U.S. crude oil inventories (including strategic reserves) are currently at their lowest levels since 1984, and Cushing delivery hub stocks are close to operational minimums. This keeps U.S. oil prices relatively strong compared to global prices and suppresses export demand.

The IEA last week predicted global oil markets will see significant oversupply by 2027. But analysts also point out that solving this round of supply crisis is largely at the expense of inventory drawdowns—these stocks will eventually need to be replenished, potentially absorbing some of the future surplus supply.

Trump Draws Red Line: Shipping Fees "Unacceptable"

While supply is rapidly recovering, the contest over future management of the Hormuz Strait is heating up.

After being attacked by the U.S. and Israel, Iran claimed control over the strait, demanding that ships without pre-authorization not be allowed to pass and requiring mandatory purchase of insurance—currently free, but widespread concern it will pave the way for future fees. Last week, Iran and Oman issued a joint statement to launch talks discussing future management arrangements for the strait, including transit costs.

In response, Trump stated directly at the White House: “This is unacceptable to me, because we have a lot of leverage. If you do this for them, you must do it for others too. This would be a game changer.”

U.S. Secretary of State Rubio was also tough: “I don’t know of any country on earth that supports transit fees or charges for passage through the strait. That will not happen.”

Currently, the US-Iran memorandum of understanding explicitly excludes transit fees during the 60-day negotiation period. But the memorandum also leaves room, allowing Oman, Iran, and other Gulf countries to jointly agree on new arrangements later. This means the issue of shipping fees is not ended, but postponed to the next stage of negotiations.

Global shipping and countries reliant on seaborne trade have issued warnings, believing that if Iran is allowed to normalize charging, it will set a precedent for other key international waterways to levy fees.

Risk Warning and DisclaimerThe market carries risk; investment needs caution. This article does not constitute personal investment advice and has not considered the individual investment goals, financial situation, or needs of any particular user. Users should consider whether any opinions, viewpoints, or conclusions herein fit their specific situation. Investment based on this is at your own risk. ```