After U.S. and Israeli airstrikes on Iran, the oil market moved against expectations, with WTI crude briefly falling to $67 a barrel, well below prewar levels. The drop has been attributed to China cutting imports by 3 million barrels per day, releases from strategic reserves, tankers slipping through the Strait of Hormuz blockade, and Trump’s public messaging aimed at steadying expectations. With the ceasefire fragile and Iran recently attacking merchant ships, eased near-term supply pressure has still driven a sharp pullback in prices.

Sen. Tom Cotton has publicly raised doubts about the Trump administration’s 14-point “memorandum of understanding” with Iran, arguing that provisions allowing Iran to resume oil sales could generate as much as $6 billion a month in revenue. If implemented, the framework would significantly ease constraints on Iran’s crude exports and lift expectations for additional global oil supply. The episode is being read as a sign of a phased easing in U.S.-Iran relations, with direct implications for oil market supply-and-demand dynamics.

The U.S. and Iran reached a principle agreement to reopen the Strait of Hormuz, easing near-term risks of oil-shipping disruptions. Analysts say the conflict has still underscored the Persian Gulf’s long-run fragility, pushing import-dependent economies to diversify away from Middle East supply toward North America and other sources. That shift could provide structural support for LNG, Brent and oil prices, and strengthen expectations for U.S. LNG exports and crude output, according to analysts cited in the report.

The U.S. government is pressing international oil companies to move from nonbinding memorandums of understanding to binding development contracts in Venezuela, as market uncertainty over Middle East supply persists with crude flows through the Strait of Hormuz largely shut. Venezuela has begun setting aside oil fields for firms that sign MOUs, and several U.S. companies are advancing toward binding deals, including Exxon sending a technical team and Chevron exploring production expansion. Washington has also allowed changes to dispute-resolution terms under Treasury general licenses, a step aimed at easing contract negotiations. The push does not immediately add output, but it has raised expectations of near-term supply flexibility.