Saudi Arabia, the UAE, Qatar, and Iran have all continued crude and LNG exports even as military tension around the Strait of Hormuz has re-escalated. This fact, following a provisional U.S.-Iran agreement, is part of what has brought WTI back to around $70 a barrel, close to pre-war levels.
However, supply continuing is not the same as supply having returned to normal. Maritime shipping volume through the Strait remains below pre-conflict levels, and wariness over a renewed escalation persists in the market. These two facts — exports have not stopped, but shipping has not normalized — need to be held apart.
The market appears to have scaled back the risk of a full supply disruption without concluding that supply has fully normalized. This intermediate state likely explains why caution persists on both sides of the $70–80 range.
When the forward curve is in backwardation, each rollover — selling the near-dated contract and buying the next — tends to generate a positive return (roll yield), which strengthens speculative capital's incentive and return expectations for entering the market. As the curve moves toward contango, this return opportunity fades, and the incentive for buyers to enter fresh positions weakens accordingly.
Recent weeks' CFTC data show open interest, net longs, and the Number of Traders all declining together. When volume, direction, and participant breadth all point the same way at once, price formation in that direction tends to follow. As the next section discusses, this likely reflects a shrinking roll yield as the curve's backwardation narrows.
That open interest, net longs, and the Number of Traders are declining simultaneously suggests this withdrawal may reflect a broad retreat across participants, not just a handful of large players. If speculative capital is exiting because the return opportunity itself — the roll yield — has narrowed, this withdrawal is better read as a response to a structural change in return opportunity than as a reaction to any single piece of news.
The current forward curve looks very different from the sharp backwardation seen at its May–June peak. The Strait of Hormuz reopening has brought a rush of crude supply, leaving the market oversupplied near term, with the prompt spread moving closer to contango. The long-dated curve has also narrowed considerably from its May–June level.
Even so, the curve heading into next year still holds a backwardation shape. This suggests the market sees the current oversupply as temporary, and expects supply-demand conditions to tighten again next year as demand recovers and inventories are rebuilt.
The diverging response between the near and long end suggests the market is treating the Strait of Hormuz reopening as the resolution of a short-term supply shock, while assessing that medium-to-long-term supply-demand fundamentals themselves have not changed. Reading market direction from the near-term curve shape alone risks missing this longer-dated pricing.
June 2026's WTI market trades within a $70–80 range amid the coexistence of supply normalization following the Strait of Hormuz reopening and a shipping volume that remains below pre-conflict levels alongside lingering wariness of renewed conflict. Speculative capital has temporarily withdrawn against a backdrop of shrinking roll yield, and the forward curve simultaneously reflects two different timescales — near-term oversupply and longer-term expectations of tightening. For now, with these two forces (the curve's supply-demand signal and shifts in speculative capital) pulling against each other, price action is likely to stay without a clear direction.