What's Affecting Oil Prices This Week? (June 23, 2025)

The price of Brent crude ended the week at $77.01 after closing the previous week at $75.18. The price of WTI ended the week at $74.93 after closing the previous week at $73.18. The price of Oman crude oil ended the week at $77.02.

At the beginning of last week, we expected that there would be further upward pressure on oil prices, since the conflict between Israel and Iran was likely to ramp up, and consequently, the price of Brent crude could reach $77. Additionally, we stated that higher prices would require signs that there was disruption to some of the oil supply – either from bombing of oil-related facilities and/or from disruption of oil flow through the Strait of Hormuz. Conversely, we stated that oil prices would drop if there were any signs that negotiations between the U.S. and Iran are resuming.

For a couple of days, there was some hope that talks could resume – but that all changed with the U.S. directly joining the conflict by attacking three of Iran’s nuclear sites – Fordow, Natanz and Isfahan. At the time of this writing, the extent of the damage to the sites and Iran’s nuclear capabilities is unknown, but certainly some damage was done.  There is also the possibility that Iran moved equipment from the sites along with its stockpiles of enriched uranium to other locations, thus limiting the effectiveness of the strikes.

While the U.S. initially stated that the attack represented a one-off attack with the intention of deterring Iran’s nuclear ambitions, President Trump subsequently put out a message on social media hinting at regime change, and Israel is indicating that it will put further military pressure on Iran to initiate regime change. The recent counterattacks by Iran, however, do not indicate that Iran’s regime is ready to collapse. Additionally, it is unlikely that Iranians will be moved to overthrow their government in response to attacks by Israel and the U.S. During recent attacks by Iran, a significant percentage of Iranian missiles – 20% and even higher – are getting past Israeli defenses, with Iran utilizing fewer, but more sophisticated missiles, including hypersonic missiles. Iran’s attack on June 22 was reported to entail 30 missiles, with 18 missiles getting past Israeli defenses. At this time, a negotiated settlement does not appear to be on the horizon – and even if talks were to resume – it is unlikely that the talks will lead to a negotiated settlement, since neither side appears to be willing to negotiate in good faith.

As such, the U.S. attack on Iran may not be the trigger to end the conflict, but instead, result in initiating a new chapter in the conflict. Iran has been weakened, and its nuclear program may have been set back – maybe by years – but Iran still has capabilities along with the possibility of support from its allies including the supply of military equipment and armaments, which would be difficult for the U.S. and Israel to interrupt since the supplies could come overland from the east. While Israel appears to be able to fly freely above Iran, Israel has limited capabilities to put troops on the ground. The same goes for the U.S. – even if the U.S. decides to do so – because of significant logistical challenges. Iran may decide to forego any military attacks on U.S. assets and troops in the region and keep its focus on attacking Israel, which may be running low on missile interceptors. This dynamic creates the possibility of the conflict ramping up with both sides suffering damage, but neither side willing to back down. It would also create a dilemma for the U.S. – with pressure on the U.S. to become more deeply involved in the conflict – but with no good options other than more bombing campaigns. Bombing campaigns along with further undermining of Iran’s leadership, through assassinations and other means, might result in a conclusion to the conflict, but this approach is likely to require an extended period, during which Israel will suffer damage, and it to be very messy – including the aftermath.

Out of desperation, Iran may attempt to stop oil traffic through the Strait of Hormuz, through which around 30% of global waterborne oil flows – some 20 MMbbl/d. We still hold the view that as long as Iran’s oil infrastructure is not damaged, Iran is highly unlikely to move to close the Strait of Hormuz since this would affect the movement of Iran’s own oil. The longer the conflict goes on, however, attacks on Iran’s oil infrastructure will become more likely – and thus, the probability of Iran moving to close the Strait of Hormuz increases. Even in this case, actions similar to those taken by the Houthis to disrupt flow in the Red Sea would seem more likely.

For the upcoming week, we expect that there will be further upward pressure on oil prices, but the increase in oil prices will be moderate – if the flow of crude oil continues unhindered – which we think is the most likely situation for this week.

For a complete forecast of crude oil and refined products and other energy-related fundamentals and prices, please refer to our Short-term Outlook.

About the Author: John E. Paisie, president of Stratas Advisors, is responsible for managing the research and consulting business worldwide. Prior to joining Stratas Advisors, Paisie was a partner with PFC Energy, a strategic consultancy based in Washington, D.C., where he led a global practice focused on helping clients (including IOCs, NOC, independent oil companies and governments) to understand the future market environment and competitive landscape, set an appropriate strategic direction and implement strategic initiatives. He worked more than eight years with IBM Consulting (formerly PriceWaterhouseCoopers, PwC Consulting) as an associate partner in the strategic change practice focused on the energy sector while residing in Houston, Singapore, Beijing and London.