Brent crude futures climbed to $73.24 a barrel on 1 July 2026 — a modest 0.40 percent gain — after talks between the United States and Iran collapsed without a final agreement, reviving concerns that supply disruptions through the Strait of Hormuz could continue. WTI followed, rising 0.39 percent to $69.77. The move comes despite a brutal preceding quarter: Brent shed roughly $45 per barrel between Q1 and Q2 2026, its steepest quarterly fall since the 2008 global financial crisis, while WTI dropped approximately $31 — its sharpest quarterly decline since the COVID-19 demand shock of 2020.
Market participants remain cautious. Shipping through the Strait of Hormuz has gradually resumed, but vessel movements are described as uneven and route visibility limited. U.S. Vice President JD Vance stated that oil flows have returned to pre-conflict levels and that Iran would not be permitted to impose transit fees on vessels using the waterway. Meanwhile, a U.S. delegation including Jared Kushner and envoy Steve Witkoff arrived in Doha for talks with Qatari mediators — not directly with Iranian officials — leaving the diplomatic path still uncertain.
Analysts have lowered their 2026 oil price forecasts for the first time since the conflict began. Morgan Stanley revised its 2027 Brent outlook downward, now projecting an average of $75 per barrel in H1 2027 and $70 per barrel in H2 2027, reflecting expectations of a sizeable global supply surplus. Industry data showing a second consecutive weekly draw on U.S. crude inventories, alongside a fall in gasoline stockpiles, offered some short-term price support; official EIA inventory figures were due at 14:30 GMT on 1 July.
What this means for our clients
The UAE's fiscal position and business environment are closely linked to oil revenues, even for founders operating in non-energy sectors. A prolonged period of softer oil prices typically shapes government spending priorities, free-zone fee adjustments, and the pace of infrastructure investment. For founders structuring their UAE operations — particularly those in logistics, trade, or any business with regional supply-chain exposure — the Strait of Hormuz situation is worth monitoring as shipping costs and transit times can shift quickly. That said, the UAE's diversification agenda and its role as a neutral trade hub have historically provided a degree of insulation from oil price cycles. We recommend clients review any contractual clauses tied to commodity pricing or freight benchmarks and speak with their advisors if regional instability affects their supply or cost assumptions. For a broader discussion of how current conditions might affect your UAE structure, we invite you to book a consultation with the Sirius team or read the full source article at Economy Middle East.