Oil futures fell more than 1% on Friday, May 29, with Brent crude for July at $92.67 a barrel and WTI at $87.64 – and those Friday prints capped the steepest weekly declines since early April: Brent down 10.5%, WTI down 9.2%. The catalyst was a report that the U.S. and Iran had reached an agreement to extend a ceasefire and lift restrictions on shipping through the Strait of Hormuz. Trump had not yet approved it and Iranian state media said it was not finalized. But the market moved as if it were done. When markets price in a result before it is formally confirmed, they reveal how badly positioning was skewed in one direction – and how much premium had accumulated in the price since February 28. YourDailyAnalysis frames the week’s move as the first credible unwind of the war premium in nearly three months.
Start with the baseline. WTI was trading below $65 before the war began. At the April peak above $144, the war premium approached $80 per barrel. The current $87-$88 range means roughly half of that premium has been stripped out in the past few weeks, accelerated by this week’s ceasefire reports. The pre-war IEA projection had global supply running at a 3.7 million barrel per day surplus for 2026 – a surplus the war supply shock buried but did not eliminate. As Hormuz approaches normalization, that underlying glut reasserts itself. Goldman Sachs had already raised its late-2026 Brent forecast to $90 per barrel in April, expecting a slow logistics recovery. The market is within range of that target already, suggesting the peace rally may have overshot Goldman’s own cautious view.
There is a counter-argument worth taking seriously from the supply side. The physical market will lag any political resolution by weeks, not days. The IEA’s May 2026 report noted that cumulative supply losses since the Hormuz shutdown exceed one billion barrels, with more than 14 million barrels per day currently shut in across Gulf producers. Shipping insurance premiums through the Strait remain at historic highs. Tanker repositioning, port processing, and hull certification after months of inactivity take weeks. The physical market will not normalize at the same speed as futures prices. Analysts at YourDailyAnalysis estimate the gap between futures market pricing and actual physical supply normalization at four to six weeks – meaning oil prices may have front-run the fundamental recovery by roughly that margin.
“Consensus remains the conflict is over, and a deal is coming,” said a commodities strategist quoted in the May 29 market reports. That statement captures a market psychology that YourDailyAnalysis interprets as a structural shift in positioning rather than just a news reaction: when the marginal trade turns decisively downside, it means the bullish Iran-war trade is already largely unwound in professional money, and only retail and momentum flows remain long. That sentiment explains the asymmetric price action: bad news from Tehran now barely moves prices higher while good news produces outsized selloffs. When consensus is positioned for resolution, the marginal trade is always on the downside. The U.S. Central Command confirmed fresh strikes on Iranian targets on Tuesday of this week – normally that would have triggered a 2-3% rally. Instead it produced a modest bounce that faded within hours. The safe-haven bid for crude has functionally collapsed.
The structural question is where oil finds equilibrium after the deal closes and physical supply normalizes. A return to pre-war fundamentals – the 3.7 million barrel per day IEA surplus, OPEC spare capacity of around 2.5 million barrels per day post-UAE departure, and non-OPEC production growth – points to a floor in the $65-$75 range on WTI. A logistics-constrained slow reopening keeps prices above $80 for longer. The two scenarios bracket a wide range. Reporters at Your Daily Analysis place the most likely 90-day equilibrium in the $75-$90 range, assuming a formal deal is signed within the next two weeks and the initial reopening is partial rather than immediate.
Watch Hormuz shipping insurance premiums as the single most reliable real-time indicator. When underwriters start quoting normal rates through the Strait, the physical market is normalizing regardless of what the futures curve shows. Editors at YourDailyAnalysis mark the point where Lloyd’s of London and the specialist war risk underwriters revise their Iran/Hormuz clauses as the single clearest commercial signal that the war premium has structurally exited the market – not any tweet, not any diplomatic announcement.
