Rystad Energy raises probability of no U.S.-Iran deal to 55 percent as Brent crude climbs above $85 per barrel
AI-madeBrent crude has surged more than 18 percent in roughly two weeks—from $72 to above $85 per barrel—as maritime attacks resumed in the Strait of Hormuz and Washington reimposed its naval blockade on Iranian ports.
On Thursday, Rystad Energy responded with a revised U.S.-Iran scenario framework, raising the combined probability of outcomes involving no substantive agreement to 55 percent. The firm now identifies August 16 — when the 60-day memorandum of understanding negotiation window expires — as the critical near-term date for oil markets.
Rystad revises scenario framework amid renewed Strait of Hormuz tensions
The revision didn’t come out of nowhere. Rystad Energy sent its updated U.S.-Iran scenario framework to Rigzone on July 17, 2026, explicitly linking the change to “a renewed deterioration in security conditions around the Strait of Hormuz.” Maritime attacks had resumed, Washington had reimposed its naval blockade on Iranian ports, and Brent had climbed more than $13 per barrel in roughly two weeks.
Even here, Rystad doesn’t project complete paralysis—dark fleet movements and selective passage could push traffic toward 3.5 million bpd by November.
August 16 now sits at the center of every calculation. That’s when the 60-day MoU negotiation window expires—Rystad calls it “the critical near-term date for oil markets.” Before that date, the key variables are attack intensity, blockade enforcement, Iranian export volumes, and how quickly commercial traffic can recover. After it, the question shifts entirely: does any political arrangement hold at all?
Why the probability of no agreement has risen to 55 percent
The core problem, according to Rystad SVP Jorge Leon, is that the MoU simply hasn’t moved on its hardest elements. Nuclear limits and control of commercial passage through the Strait of Hormuz remain unresolved—and those aren’t peripheral issues. They’re the whole dispute.
Both sides have responded by applying what Rystad describes as “calibrated military pressure.” Maritime attacks have resumed, and that resumption has done real damage to the diplomatic framework that briefly seemed to be holding in mid-June.
Leon didn’t abandon the base case, but he was candid about its fragility. “The narrow deal is still our base case,” he said, “but it has become a considerably less comfortable one.” The math behind that discomfort isn’t complicated: stalemate at 35 percent and renewed fighting at 20 percent combine to 55 percent, meaning no-deal outcomes are collectively more likely than any agreement scenario.
The four scenarios and their oil price risk premiums
Rystad’s framework lays out four distinct paths, each carrying a different geopolitical risk premium baked into the oil price.
Full resolution gets just a 5 percent probability. Under this outcome, the acute geopolitical premium largely disappears, leaving only a residual $0 to $2 per barrel. It’s the best case — and Rystad clearly doesn’t think it’s coming.
A narrow deal remains the base case at 40 percent, sustaining a $5 to $10 per barrel premium that reflects the deferred nuclear issue and Iran’s retained leverage over the strait. Rystad projects traffic recovering to around 10 million barrels per day by mid-August and approximately 14 million bpd by October under this scenario.
Stalemate is now the second most likely outcome at 35 percent, carrying a $10 to $15 per barrel premium. It doesn’t mean zero traffic indefinitely—shipowners, insurers, and traders are expected to gradually adapt through convoys and bilateral assurances, pushing strait throughput from roughly 2.5 million bpd in August toward approximately 8 million bpd by November.
Renewed fighting at 20 percent is the worst-case scenario, with a $15 to $20 per barrel premium. Even here, Rystad doesn’t project complete paralysis—dark fleet movements and selective passage could push traffic toward 3.5 million bpd by November. This probability has risen specifically because recent events have shown how quickly a fragile diplomatic framework can unravel.
Diesel and refined product markets add pressure beyond crude prices
Crude prices are getting the headlines, but HSBC analysts—including chief economist Paul Bloxham—warned in a separate note sent to Rigzone on Thursday that the crude price is “far from all that matters.”
Refined product supplies have been heavily disrupted. Limited crude feedstock availability, reduced output from Middle East refineries, no slack in the global refining system, and depleted product inventories are all piling on simultaneously. Diesel has been the sharpest pressure point.
The numbers are striking. The benchmark 3-2-1 crack spread — a widely watched measure of refining profitability — recently surged to its highest level on record. The spread between U.S. diesel and WTI crude has now exceeded levels seen during the acute phase of the Russia-Ukraine war, with jet fuel and sulfur prices climbing alongside it; sulfur is near record highs, and helium markets are tightening too.
The traffic data explains why. According to HSBC, the pre-war average through the Strait of Hormuz ran around 138 ships per day. In the first week of July, that had already fallen to a daily average of 29 ships—and over the past week, it dropped further to just 13 ships per day.
Background: What has kept oil prices from reaching earlier extremes
For all the concern, Brent at $85 is still well below its recent peak. The price surged above $120 per barrel in late April before falling back to $70 in early July, so the current level represents a significant rebound, not a new extreme.
Several factors have helped contain the damage. Demand compression across Asia has reduced the call on global supply, and strategic reserve releases have allowed the U.S. to raise oil exports by approximately 3 million bpd since February, while China has cut imports by roughly 4 million bpd over the same period. A partial reopening of the strait has provided some additional relief.
HSBC analysts also note that crude inventories, while falling, remain far from critical levels—their colleagues in the oil and gas team see “tank bottom” as many months away.
Cracks are spreading at record levels
The core message from both Rystad and HSBC is that the situation has deteriorated meaningfully since mid-June but remains short of worst-case. Rystad’s revised framework assigns a 55 percent combined probability to stalemate or renewed fighting — outcomes that would sustain geopolitical risk premiums of $10 to $20 per barrel. The base case, a narrow deal, still holds at 40 percent but has weakened. August 16 is the next hard deadline. Beyond crude, refined product markets—especially diesel—are under significant independent pressure, with cracks spreading at record levels. And while Brent at $85 reflects genuine risk, it remains roughly $35 below the April peak, held in check by demand destruction, reserve releases, and gradual supply adaptation.
Kelly is an experienced writer with 15 years of experience exploring the big stories that shape our world, from tech breakthroughs and space exploration to climate, energy, and the fascinating quirks of science. She has a talent for turning complex ideas into sharp, memorable insights that stay with readers long after they’ve finished reading.
