Crude has cracked. WTI is ~$70 per barrel, after a brutal month in which the U.S. benchmark fell from the triple-digit panic of mid-May to something that looks suspiciously like normal. WTI is down $21.41 from a month ago, a 21.3% drop. Gasoline traders are exhaling. Airlines are recalculating fuel hedges. And Amrita Sen, co-founder and director of research at Energy Aspects, went on CNBC this morning to argue that almost everyone is reading the tape wrong.
Her case is this. The Middle East crisis that sent Brent to $138.21 on April 7 remains unresolved, temporarily papered over by a flood of Iranian barrels that Washington itself authorized.
The Iranian supply wave that washed prices lower
Start with the barrels. Sen told CNBC, “There is an enormous amount of Iranian oil. Given the waivers the US issued, allows Iran to sell pretty much everything, not just oil that was in storage. So we’ve calculated about 130 to 150 million barrels of Iranian oil is available to the market right now.”
Most retail investors are missing the implication. The U.S. waivers do not just unlock floating storage that Tehran has been accumulating. They unlock new production too, which means the supply impulse keeps refreshing itself rather than running out in a few weeks. Layer that on top of trapped tankers finally squeezing out of the Strait of Hormuz, and you get the price action of the last month.
The EIA, in its May Short-Term Energy Outlook, estimated that production shut-ins averaged 10.5 million barrels per day in April and were expected to peak at nearly 10.8 million b/d in May. Iran has been carved out of those shut-in figures because the U.S. blockade has curtailed Iran’s ability to export. The waivers reverse that. So the marginal barrel in late June is, improbably, Iranian.
Shipping costs and a mine problem nobody is pricing
Cheap headline crude tells you nothing about the cost of getting it to a refinery. Sen pointed out on CNBC that “The overall market isn’t necessarily reflecting that the situation still is far from normal… Shipping costs are incredibly high right now, and you still can’t find enough shippers willing to go back in there.”
Then there is the literal hardware in the water. On mine clearance, Sen said “This is going to take months to clear up. It’s not going to be a matter of days,” with some reports citing as many as 80 mines in one corridor. The real stress test comes in a few weeks when fresh tankers have to transit back in rather than just sail out of what is already inside.
Volatility has already been violent. Crude oil implied volatility has averaged 78% since the conflict began in late February, with daily Brent implied vol reaching 106% on March 12, the highest since the early COVID shock.
The Strait is permanently smaller, and Iran wants a toll
“The Strait of Hormuz flows will never go back to pre-crisis levels, in part because you have countries like Saudi Arabia who have invested in redundancy for years, and they actually have the east-west pipeline, which they will continue to flow.” Saudi Arabia and the UAE spent the last decade building exactly this option. They are going to use it.
The UAE has already taken a dramatic step, with the EIA noting that the UAE announced its departure from OPEC, effective May 1, 2026, a move that shrinks the cartel’s spare capacity assumptions to 2.5 million b/d in 2027, down from a previous forecast of 3.8 million b/d.
Then there is Iran’s own incentive. Sen said, “I do think ultimately this is about the repatriation funds that Iran requires for the reconstruction of their country. And as long as that is around, I’m not convinced that a toll will be in place.” Translation. Tehran needs hard currency for rebuilding, so a Hormuz transit fee, formal or otherwise, is on the table.
What energy investors should take from this
The supply-demand math suggests a market still leaning bullish underneath the headlines. The EIA forecasts global oil inventories will fall by an average of 8.5 million b/d in Q2 2026, pushing Brent to an average of around $106/b in May and June. That is the official baseline, and current Brent at $76.49 is well below it.
Sen’s warning is that the Iranian waiver wave is a one-time liquidity event sitting on top of a structurally tighter market. If she is right, the cheap crude on screen this morning is the trap.
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