A provisional ceasefire framework between the United States and Iran has sent oil prices sliding, and bunker fuel buyers may want to act quickly — according to hedging firm GRM, a window for locking in forward prices could be opening.
According to Ship & Bunker, GRM issued a note to clients on Monday morning advising that buyers should consider hedging their fuel consumption over the next six to twelve months, particularly if Brent crude falls further in the days following the announcement.
A Deal, But Not a Return to Pre-War Prices
Late Sunday, it was reported that the US and Iran had provisionally agreed on a framework to end hostilities, with a memorandum of understanding set to be signed on June 19. The deal includes a 60-day window for negotiating more complex issues, including Iran’s nuclear programme.
As reported by Ship & Bunker, ICE Brent crude futures were trading at $83.38 per barrel as of Monday morning in London — down sharply from $87.33/bl at Friday’s close, but still well above the $70.88/bl level recorded on February 27, before the war began.
GRM cautioned that buyers should not expect a full reversal to pre-conflict pricing. “Oil prices are unlikely to return to the USD 60-70 level seen before the war,” the firm stated in its client note, as cited by Ship & Bunker.
Why Prices Can’t Simply Snap Back
The reasoning behind GRM’s assessment centres on the structural disruption caused by roughly three months of Strait of Hormuz closure. As the firm explained, according to Ship & Bunker, “the market has borrowed a large number of barrels of oil from the future.”
Inventories need replenishment, strategic reserves may need rebuilding, and deferred demand must be absorbed — all while Middle Eastern oil production restarts and global tanker traffic normalises. GRM also flagged that a risk premium will likely remain priced into markets over the coming 60 days, should the negotiations falter.
In the near term, GRM said Brent could fall to the $80–82/bl range, or potentially lower as European and US market participants entered trading on Monday.
The Hedging Case
Looking further out, GRM expects Brent to trade within a $75–100/bl range over the next six to twelve months, with the firm leaning toward the lower end of that band.
Ship & Bunker notes that its G20-VLSFO Index — tracking prices at 20 major bunkering ports — stood at $805/mt on Friday. That figure has carried an average premium of 18.8% to Brent since the war began. Applying that premium to a hypothetical Brent price of $75/bl would place G20-VLSFO at approximately $670.50/mt, a meaningful reduction from current levels.
Does This Matter to You?
For those managing fuel cost exposure across vessel fleets, the combination of falling spot prices and an uncertain but time-limited diplomatic window creates a situation worth monitoring closely. GRM’s advice to consider hedging — specifically if Brent approaches the $75/bl level — reflects the view that this dip may represent a genuine medium-term buying opportunity, while upside risk remains if the 60-day negotiations collapse.
Bunker prices remain well above pre-war levels, and the pace of market normalisation will depend heavily on how quickly physical oil flows and tanker routing can recover. Any breakdown in the US-Iran framework within the 60-day window could see prices rebound sharply.
Gulf Bunkering does not provide operational or security guidance. This article is for informational purposes only. Operators should consult flag state authorities, P&I clubs, and relevant advisories for decisions relating to transit planning.
Sources: Ship & Bunker
