Expect to see oil exports from the Mideast back to normal by the end of July, says Daan Struyven

Summary

Oil prices tumbled after a U.S.-Iran ceasefire raised expectations for Strait of Hormuz flows to normalize. Daan Struyven of Goldman Sachs outlined a base case for WTI crude staying near $75 through year-end then drifting to $70 in 2027, with Middle East exports back to normal by July and production recovering by October. He sees upside price risks from continued strait uncertainty and low inventories, balanced by a large supply surplus next year from the Americas. A host briefly mentioned Exxon as a potential buy if oil holds around $70.

• Oil dropped sharply after the U.S.-Iran ceasefire agreement and anticipated reopening of the Strait of Hormuz.
• Goldman Sachs base case: WTI at $75 by year-end 2025, declining to $70 next year (long-term fair value).
• Middle East oil exports expected to normalize by end of July, with production returning to pre-war levels by October.
• UAE and Saudi Arabia have spare capacity and will likely increase production above pre-war levels to stabilize markets.
• Risks to oil prices remain skewed to the upside due to uncertainty over the Strait staying open, low inventories, and a security premium.
• A large oil surplus is forecast next year because of strong supply growth in the Americas, which has helped absorb the supply shock.
• The host casually suggested Exxon might be a buy if oil stays around $70, though the guest did not endorse that view.