# TESTIMONY: Oil at $70 — the Iran deal eases the pump but strains the budgets

> On June 25, 2026, the WTI — the benchmark American crude barrel — collapsed to $70.05, its lowest level since mid-February of

- Author: Maxime Marquette
- Publisher: MadMax (https://mad-max.co)
- Section: Profile
- Published: 2026-06-26
- Canonical URL: https://mad-max.co/en/article/temoignage-le-petrole-a-70-l-accord-iran-soulage-les-pompes-mais-fragilise-les-b

## Introduction: a vertiginous drop that tells the story of a world in transition

### WTI crashes to $70.05 on June 25

On **June 25, 2026**, the **WTI** — the benchmark American crude barrel — collapsed to **$70.05**, its lowest level since mid-February of the same year. In a single day, the decline reached **4.3%**. **Brent**, the international benchmark, fell below **$73.31**.

These figures tell a story the global economy is still absorbing: the end — at least provisionally — of the war between the **United States and Iran**, triggered on **February 28, 2026**, is reshaping energy prices at a speed few analysts had anticipated. In less than four months, the barrel had climbed from **$70** to more than **$125** at the April peak, before returning to its starting point. A geopolitical roller coaster with profound economic consequences.

### What these figures mean in concrete terms

For millions of Americans who fill their tanks every week, the price drop is tangible good news. Gas prices, which had hit record highs during the months of conflict, are beginning a decline that should continue. After weeks of expensive fuel, American household budgets can breathe a little.

But we need to look beyond the gas pump. Every time the barrel falls, oil-producing states — including some US allies — see their revenues contract. And the mechanics of oil markets, with their production, storage, and financing dynamics, trigger a chain of second-order effects that the simple satisfaction of cheaper fill-ups cannot erase.

*I remember the heated debates during the peak at $125. Everyone was crying catastrophe. Now that the barrel has returned to $70, the silence is almost as deafening. The truth is that oil markets are incapable of finding a stable equilibrium — and the consequences of that instability always fall on the same shoulders.*

## The USA-Iran war: 106 days that changed everything

### From February 28 to June 15: the timeline of a conflict that paralyzed Hormuz

The war between the **United States and Iran** officially lasted **more than 106 days**, from **February 28, 2026** to **June 15, 2026**, the date of the signing of the **MOU** — the 14-point ceasefire framework agreement between **Trump** and Iranian president **Pezeshkian**. During those one hundred and six days, the **Strait of Hormuz**, through which roughly one-fifth of the world's oil transits, was partially or completely blocked.

The consequences were immediate and severe. **Brent** was around **$70** per barrel before hostilities began. At the April **2026** peak, it exceeded **$125** — a gain of nearly **80%** in less than two months. Global economies absorbed this shock head-on, through energy inflation, logistical disruptions, and widespread geopolitical uncertainty.

### The backlash: a normalization under conditions

With the **June 15 MOU**, the geopolitical pressure on oil markets begins to dissipate. But this normalization is far from guaranteed. The agreement is only a **60-day** framework toward a final deal — the **deadline is set for August 17, 2026**. If negotiations fail, conflict could resume and the barrel price would spike again.

Markets are therefore placing a risky bet: they are pricing in a resolution to the conflict that is not yet guaranteed. **Goldman Sachs** has revised its **Brent** forecast down to **$80** per barrel for the fourth quarter of **2026**, versus **$90** previously — but this revision is conditional on the agreement holding. It is a wager on diplomacy.

*Goldman Sachs is always the first to revise its forecasts when markets move — and the last to admit it couldn't predict the war between the United States and Iran. I take their projections with a grain of salt: they reflect a central scenario, not a certainty.*

## OPEC+ and the production strategy: a third consecutive increase

### 188,000 additional barrels per day in July

On that same **June 25, 2026**, **OPEC+** announced a new production increase of **188,000 barrels per day** for the month of July. This was the **third consecutive monthly increase** by the cartel, which is seeking to recapture market share and capitalize on the window of opportunity opened by the geopolitical détente.

This **OPEC+** decision adds to the downward pressure already exerted by the prospect of Iranian oil returning to markets. **The US Treasury** has lifted all sanctions on Iranian oil until **August 21, 2026** — a window that allows Tehran to begin selling its oil again. The signal sent to markets is clear: supply is about to increase significantly.

### Iraq enters the equation

**Iraq**, a key member of **OPEC+**, announced Sunday **June 21, 2026** a production increase targeting **4.2–4.3 million barrels per day**. This decision fits the regional dynamic of rebuilding supply after the disruptions caused by the USA-Iran war.

The **ANZ** bank estimates that **2 to 3 million barrels per day** will be restored in the first four weeks following the reopening of **Hormuz**, with potentially **1 to 2 million additional** in the third quarter of **2026**. If these projections hold, the market will be flooded with oil in the short term — and prices could fall even further.

*OPEC+ has always had an internal discipline problem. Its members announce quotas and exceed them. Every country assumes the others will respect the limits while it quietly cheats a little. If that dynamic resurfaces, the price drop could go well beyond current forecasts.*

## American consumers: short-term winners

### Trump's campaign promise: cheap oil

For the **Trump** administration, falling fuel prices are a political victory to display. Since the start of his second term, **Trump** has hammered home that his administration would bring energy prices down — "**drill, baby, drill**" was his mantra. The deal with Iran, combined with **OPEC+** production increases, hands him on a platter the proof of his rhetoric.

American pump prices have been falling for **multiple consecutive weeks**, according to market data. For American households that spend a significant share of their budget on transportation — especially in rural and suburban areas without access to public transit — this drop is a real and measurable relief.

### The paradox of the energy win

But this short-term energy win carries a paradox the administration prefers to avoid. Low prices reinforce dependence on hydrocarbons and reduce the attractiveness of renewable energy, precisely at a moment when the global energy transition is accelerating. The cheaper oil gets, the less urgent it becomes to invest in alternatives.

In Europe and **China**, investments in renewable energy continue to grow, independent of the barrel price. America risks getting trapped by cheap oil — beneficial in the short term, competitively disadvantageous in the long run. **Geopolitics can reverse prices just as quickly as it made them fall.**

*I understand that filling your tank at a reasonable price is a daily reality for millions of families. That is not trivial. But I am unable to ignore that this immediate satisfaction could cost very dearly in ten years if it delays the energy transition we all need.*

## Federal budgets under pressure: the hidden side of the drop

### Oil revenues and the American federal budget

The drop in oil prices does not only affect consumers. It also hits American federal finances, which benefited during the months of conflict from tax revenues tied to domestic oil production — the American shale industry had run at full capacity in that high-price environment.

With the barrel returning below **$75**, margins for American shale producers compress. Some extraction projects become marginally unprofitable again. American production could plateau or even slightly decline if prices remain depressed too long — which paradoxically would help rebalance the market, but with a time lag.

### Producing states: a drop that hurts more than America

The oil states that suffer most from falling prices are not American consumers but high-cost producers: **Russia**, which needs a barrel above **$80** to balance its war budget in Ukraine, and certain **OPEC+** members like Angola or Nigeria, whose economies are structurally dependent on oil revenues.

For **Putin's Russia**, every dollar less on the barrel is an additional drain on its capacity to finance aggression against **Ukraine**. The oil price drop tied to the Iran deal is therefore, indirectly, additional pressure on the **Moscow** regime. **This positive geopolitical side effect is one that too few analysts sufficiently highlight.**

*This is one of the rare positive effects of this chaotic geopolitical sequence. Every cheaper barrel of oil is one less ruble to fund Putin's war in Ukraine. I am not complaining about that — even if the mechanics leading there are far more complex than a simple virtuous equation.*

## The IMF sounds the alarm: normalization will be slow

### The IMF report of June 25: reasons not to get carried away

The **IMF** published on **June 25, 2026** a clear analysis: while energy and commodity prices are indeed falling after the Iran deal, **normalization will be slow**. This warning is important for understanding why markets should not let themselves be swept up by excessive optimism.

Global energy supply chains have been disrupted for more than **106 days**. Oil tankers rerouted their paths, futures contracts were restructured, strategic reserves were partially drawn down. Rebuilding these equilibria takes time — several months at minimum, according to **IMF** economists.

### The geopolitical risk premium: still present

Even with the agreement in place, a **geopolitical risk premium** will continue to weigh on oil prices. Markets do not fully trust an agreement that still needs to be finalized by **August 17, 2026**. **BNP Paribas** sets **$75** as the durable Brent floor — below that level, the logic of supply and demand risks discouraging oil investments that are nonetheless necessary.

A **CNBC** analyst estimates that prices could settle around **$65 to $70** if the Iran deal holds fully. But this low range incorporates an optimistic scenario of complete conflict resolution — a scenario that remains conditional on nuclear negotiations that are still highly uncertain.

*The IMF is rarely wrong on major macroeconomic balances. And when it says normalization will be slow, I believe it. Markets tend to overestimate the speed of adjustments — and underestimate the persistence of distortions created by geopolitical conflicts.*

## Iran, oil, and reconstruction: a tripartite tension

### $300 billion for Iranian reconstruction

The **MOU** of **June 15, 2026** offers Iran considerable incentives in the event of a final agreement: the lifting of sanctions and **$300 billion** for post-war reconstruction. This is a colossal sum that, if realized, will fuel considerable internal Iranian energy demand.

An Iran under reconstruction needs energy for its industries, its infrastructure, its construction sector. A portion of Iranian oil exports could therefore be redirected toward domestic consumption during the reconstruction phase — which would slightly attenuate the downward pressure on global prices caused by the return of Iranian supply.

### The lifting of oil sanctions: a gradually reopened tap

The **US Treasury** has lifted all sanctions on Iranian oil until **August 21, 2026**. But this lifting does not mean an immediate return to full-speed exports from Tehran. International buyers — especially Asian refiners who had developed alternative circuits — must reconfigure their supply chains, their contracts, their logistics.

The full return of Iranian oil to global markets will take several months. Iran itself must restore infrastructure damaged by the war, renegotiate contracts, reactivate interrupted logistical links. **Reopening an oil spigot after a war is an operation measured in quarters, not weeks.**

*I am struck by the way financial markets anticipate returns to normal that actually take far longer. The real economy — pipelines, tankers, refineries, contracts — resists the pull of markets. That friction is real and it matters.*

## Prospects for European and Asian consumers

### Europe: between relief and persistent dependence

For **Europe**, the drop in oil prices is a breath of fresh air after months of high energy prices that had fueled inflation and weighed on industrial competitiveness. European countries, which have largely substituted Russian gas with American **LNG** and other sources, benefit indirectly from the easing of oil markets.

But Europe remains dependent on hydrocarbon imports for a substantial share of its energy consumption. The price drop is welcome, but it does not resolve the structural question of European energy sovereignty. **The urgency of the transition to renewables does not disappear with a barrel at $70.**

### Asia: the great geographic beneficiary

Asian economies — **China**, **India**, **Japan**, **South Korea** — are among the largest importers of Persian Gulf oil. The reopening of the **Strait of Hormuz** and the price drop directly benefit them. For the Chinese economy in particular, which was showing signs of slowing, cheaper energy is a welcome stimulus.

**China** had also diversified its supply during the war, buying heavily discounted Russian oil in bulk. With the return of Gulf oil, Beijing regains supply flexibility that strengthens its position in global trade negotiations. **Petro-geopolitics rarely benefits the same actors in both phases of the cycle.**

*China, once again. While the West tears itself apart between Trump and his allies, while the USA-Iran war upends markets, Beijing observes, adapts, and positions itself. Their ability to capitalize on geopolitical chaos they didn't create is, I must admit, both impressive and deeply unsettling.*

## American shale producers: between relief and anxiety

### Shale's breakeven threshold under pressure

American **shale oil producers** largely benefited from high prices during the months of conflict. With a barrel at **$125** at the peak, even the most expensive deposits to exploit were highly profitable. The drop to **$70** radically changes the economic equation for some marginal operators.

The breakeven threshold for American shale varies by basin: it is around **$50** in the Permian Basin (the most efficient) but can exceed **$65 to $70** in more challenging areas like parts of the Bakken or Eagle Ford. At **$70**, margins thin sharply for the least efficient operators.

### Consolidation and sector resilience

The American oil sector has nonetheless learned from past mistakes. After the boom-and-bust cycles of the 2010s, the major shale players have structurally reduced costs, adopted more efficient technologies, and maintained more reasonable debt levels. A drop to **$70** is uncomfortable but not catastrophic for most of the sector.

A price correction could actually accelerate welcome consolidation in a still-fragmented sector. **Large companies will acquire marginal operators at distressed prices, strengthening the overall efficiency of American production.** That is the capitalist logic of the oil cycle — brutal but predictable.

*The American shale sector is more resilient than people thought in 2015. But it is not invulnerable. And when prices fall, it is always the small operators, with their local employees, who pay the steepest price. Consolidation benefits shareholders, not the oil workers of Texas or Wyoming.*

## Financial markets: the reaction and its limits

### The stock market and oil: a complex correlation

The drop in oil prices has mixed effects on financial markets. It eases inflationary pressure, allowing the **Federal Reserve** to maintain or lower its benchmark rates — which is generally positive for equity markets. But it weighs on energy stocks, which represent a significant share of stock indices.

For emerging markets heavily dependent on oil exports, falling prices translate into pressure on their currencies and foreign reserves. Countries like **Nigeria**, **Angola**, and **Kazakhstan** see their fiscal outlooks deteriorate — and the risks of political turbulence associated with that deteriorate as well.

### The dollar and energy: a structural relationship

Oil is denominated in **US dollars**, and falling oil prices mechanically affect the flow of dollars to exporting countries. These petrodollars, which partially recycled back into American financial markets as investments, could slightly diminish — a marginal but real pressure on the financing of American debt.

This relationship between oil prices, petrodollars, and the financing of the American deficit is one of the most underestimated dynamics in the global economy. It operates silently but constantly. **Every variation in barrel prices ripples through hundreds of financial circuits that most citizens never see.**

*I am not an economist in the academic sense. But I have observed markets long enough to know that the second and third-order effects of oil shocks are always underestimated in initial analyses. What we are seeing today is only the beginning of a cascade that no one can fully anticipate.*

## Russia under pressure: the unexpected geopolitical benefit

### Putin facing the $70 barrel

**Vladimir Putin's Russia** needs a high barrel price to finance its war economy. The Russian budget had been built on the assumption of a barrel around **$80**. At **$70**, Russia's budget deficit widens and pressure on reserves intensifies.

The combination of Western sanctions, the cap on Russian oil prices, and now the general fall in crude prices creates mounting financial pressure on the **Kremlin**. Every dollar less on the barrel is billions of rubles less available to finance the aggression against **Ukraine**. **Supporting Kyiv also runs through economic pressure on Moscow — and oil markets contribute to that involuntarily.**

### The window of opportunity for Ukraine

For **Ukraine**, the drop in oil prices following the Iran deal represents a form of indirect but real support. A **Putin** under financial pressure is a **Putin** less capable of sustaining his war effort over the long term. **Volodymyr Zelensky** and his allies understand this clearly: economic pressure on Russia is a front in its own right.

The Western coalition supporting Ukraine — including the United States under **Trump**, despite the ambiguities of his policy — maintains its energy sanctions on **Russia** even in the context of the deal with Iran. This consistency is essential to avoid offering **Putin** a financial lifeline he would use to prolong his war.

*It can be difficult to see the connections between the oil price in Oman and the trenches in the Donbas. And yet, they exist. Putin's war has a cost, and that cost depends on Russian oil revenues. Weakening those revenues is a form of solidarity with Ukraine — even an involuntary one.*

## Toward a new equilibrium in the global oil market

### The question of the sustainability of low prices

The fundamental question is whether today's low oil prices are sustainable or whether they represent a temporary correction before a rebound. Arguments for lasting low prices include: **OPEC+** production increases, the return of Iranian oil, consolidating peace in the Middle East, slowing Chinese demand.

Arguments for a rebound include: the fragility of the USA-Iran deal until **August 17**, potential production cuts if prices penalize **OPEC+** members too severely, Asian demand that could bounce back with lower prices, American shale production that could slow. The balance between these opposing forces will determine the barrel price for the rest of **2026**.

### Scenarios for the second half of 2026

The central scenario — Iran deal held, increased production, prices between **$65 and $80** — is the most likely according to available analysis. But the distribution tails are thick in both directions. A failure of nuclear negotiations before **August 17** could send the barrel back toward **$100** and beyond. A global recession, on the other hand, could push it below **$60**.

What markets are pricing today is the central scenario. But geopolitical events of the past six months have shown that tail probabilities materialize more often than expected. **Caution in oil market forecasting is not a weakness of analysis — it is wisdom drawn from experience.**

*I do not know where oil will be in six months. Nobody knows with certainty. But I know that markets tend to forget too quickly the lessons that crises have just taught them. And that the next geopolitical surprise is probably not where anyone expects it.*

## The political signal for Trump: a double-edged sword

### The rhetorical victory and its structural limits

For **Donald Trump**, the drop in oil prices following the Iran deal is a political victory he wastes no time exploiting. "**I brought gas prices down**" will be one of his campaign arguments — even if the reality is infinitely more complex and the factors behind this drop go far beyond his decisions alone.

But this victory cuts both ways. American oil states — **Texas**, **New Mexico**, **North Dakota** — where Trump has a solid electoral base, are directly affected by the falling crude price. Oil sector workers see their employment and wage prospects deteriorate as the barrel sits at **$70**.

### American domestic politics tested by energy prices

The tradeoff between consumers happy to pay less at the pump and producers unhappy to see their margins compress is a classic in American energy politics. **Trump** will struggle to satisfy both simultaneously — unless prices stabilize in a comfortable zone for both parties, around **$75 to $80**.

That is precisely why the Iran deal is a "necessary evil" in Trumpian logic: it relieves consumers and reduces inflationary pressure, but it weakens American oil producers and their access to credit. **The energy policy of a major democracy can never please everyone at the same time — and Trump is no exception.**

*Trump loves clean victories. The oil drop is a more ambiguous victory than it appears. Gas pumps are happy. Texas is anxious. And the White House must navigate between those two realities without stumbling. That is politics — and politics is rarely as simple as a tweet.*

## The Iran deal and the future of the Middle East: a price to pay

### Hormuz reopened, but at what geopolitical cost?

The reopening of the **Strait of Hormuz** is the material condition for the oil price drop. But this reopening carries a geopolitical price. The United States has granted Iran a provisional lifting of oil sanctions, the prospect of **$300 billion** in reconstruction aid, and a diplomatic legitimacy Tehran had sought for years.

What has been conceded to Iran in this deal raises legitimate questions. **Israel**, which considers Iran an existential threat, looks with great suspicion at the rehabilitation of Tehran. The Gulf monarchies are playing a subtler game — they support the deal but keep their distance from the normalization of Iran.

### The 60 days that will decide everything

The deal reaches its full meaning — or its failure — within the **60 days** separating the **June 15 MOU** from the **August 17, 2026 deadline**. In those two months, American and Iranian negotiators must transform a fourteen-point framework into a final agreement on extraordinarily complex questions: the Iranian nuclear program, **IAEA** inspections, normalization of bilateral relations.

If negotiations fail, the optimistic scenario priced in by markets collapses. The barrel climbs again, regional tensions resume, and America finds itself once more facing difficult strategic choices. **These 60 days may be the most important of the decade for global oil geopolitics.**

*I am both fascinated and anxious about these diplomatic deadlines. The August 17 deadline is a sword of Damocles hanging over oil markets, global economies, and the lives of millions of people in the Middle East. Sixty days to resolve what decades of diplomacy have failed to settle. That is asking a great deal.**Ultimately, what I observe in 2026 resembles a historic turning point whose full scope we have not yet measured. The decisions being made now — diplomatic, economic, military — will define the world in which our children grow up. That responsibility should weigh on every decision-maker.*

## Conclusion: the complex truth behind a simple number

### $70 — a figure concealing a multidimensional reality

The barrel at **$70** on **June 25, 2026** is a simple fact concealing an extraordinarily complex reality. It is the product of a **106-day** war, a fragile peace agreement, a global trade war, production decisions by dozens of countries, and market expectations that can reverse within hours.

For consumers, it is good news. For the budgets of producing states — including **Putin's Russia**, which finances its war in **Ukraine** with oil revenues — it is welcome pressure. For financial markets, it is a mixed signal to interpret with caution. For the energy transition, it is a potential brake.

### Looking beyond the posted price

The real question is not the level of oil prices today. The real question is: what world are we heading toward in the years to come? A world still massively dependent on hydrocarbons whose price fluctuates with the rhythm of wars and peace deals? Or a world that invests decisively in energy sources subject to neither the whims of **OPEC+** nor the diplomatic crises of the Middle East?

The fall of oil to **$70** can be a relief — or a pretext for not changing. **The choice belongs to democratic societies and their leaders. And that choice is being made right now, while pump prices reassure — and lull us to sleep.**

**By Maxime Marquette, columnist**

## Columnist's transparency note

### Editorial stance

I am not a journalist but a **columnist and analyst**. My expertise lies in observing and analysing the geopolitical, economic and strategic dynamics that shape our world. My work is to take political strategies apart, to understand global economic movements, to put the decisions of international actors in context and to offer analytical perspectives on the changes that are redefining our societies.

I do not claim the cold objectivity of traditional journalism, which stops at reporting facts. **I claim analytical clarity**, rigorous interpretation and a deep understanding of the complex issues that concern us all. My role is to give meaning to the facts, to place them in their historical and strategic context, and to offer a critical reading of events.

### Method and sources

This text keeps the basic distinction between **verified facts and interpretive analysis**. The rule never changes: a factual claim is published only when a verifiable source supports it, and the sources this article actually used are listed under **Sources**, never here.

**Primary source families** used by the publication, when the story has them: official statements from governments and international institutions, public statements by political leaders, reports from intergovernmental organisations, dispatches from recognised international news agencies.

**Secondary source families**: specialised publications, internationally recognised news media, analyses from established research institutions, reports from industry organisations.

When an article cites statistical, economic or geopolitical data, it comes from the institutions that produce it (intergovernmental organisations, central banks, national statistics offices), and the exact institution is named under **Sources**.

### Nature of the analysis

The analyses, interpretations and perspectives in the analytical sections of this article are a **critical, contextual synthesis** based on the information available, the trends observed and the expert comments cited in the sources consulted.

My role is to interpret these facts, to set them in the context of today's geopolitical and economic dynamics, and to give them a coherent meaning within the larger story of the changes shaping our time. These analyses reflect expertise built through continuous observation of international affairs and an understanding of the strategic mechanisms that drive global actors.

This article describes a documented state of affairs on its publication date, not a prediction: later developments may shift its outlook. No update is promised in advance; when an article is corrected or completed, the change is dated in the text.

## Sources

### Primary sources

- [Rzzro Intelligence — WTI at $70, OPEC+ +188,000 bpd — June 25, 2026](https://rzzro.com/news-insights/wti-crashes-demand-fears-opec-jun-25-2026.html)

- [US News / IMF — Energy prices post-Iran deal, slow normalization — June 25, 2026](https://money.usnews.com/investing/news/articles/2026-06-25/imf-says-energy-commodity-prices-fall-after-iran-deal-but-will-take-time-to-normalize)

### Secondary sources

- [Reuters — Brent -3% after progress in Iran talks — June 22, 2026](https://www.reuters.com/business/energy/brent-oil-rises-more-than-1bbl-after-bumpy-start-us-iran-peace-talks-2026-06-21/)

- [Al-Monitor — Oil -3.4% after USA-Iran progress signals — June 22, 2026](https://www.al-monitor.com/originals/2026/06/oil-falls-more-3-after-iran-us-signal-progress-talks)

- [Al Jazeera — Oil prices return to pre-war levels — June 25, 2026](https://www.aljazeera.com/news/2026/6/25/oil-prices-back-to-pre-war-levels-on-rising-middle-east-supply)

- [TradingKey — Brent $77.90 and WTI analysis — June 23, 2026](https://www.tradingkey.com/analysis/commodities/oil/261984012-wti-us-brent-oil-tradingkey)

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Source: Maxime Marquette, MadMax. When citing, name the author and link https://mad-max.co/en/article/temoignage-le-petrole-a-70-l-accord-iran-soulage-les-pompes-mais-fragilise-les-b