Brent anchored near $73 to close worst quarter since pandemic as Doha diplomacy stalls

Global crude benchmarks finished mixed but largely unchanged on Tuesday, locking in their steepest monthly and quarterly losses since the 2020 COVID-19 pandemic.

Brent contract eased 23 cents (0.3%) to settle at $72.92 a barrel—bringing its total June collapse to 21% and Q2 losses to 38%—while US WTI dropped $1.25 (1.8%) to $69.50.

This capitulation has aggressively eroded the geopolitical risk premiums of the four-month Middle Eastern conflict, dragging benchmarks back near their late-February pre-war baselines.

Near-term market sentiment was weighed down by cooling diplomatic expectations in Qatar. Although senior US envoys arrived in Doha to navigate the fragile June 17 interim ceasefire, Qatari officials confirmed that high-level political summits with Tehran have been deferred. Negotiations are restricted to baseline technical and regional security talks, clouding the timeline for an unconditional reopening of the Strait of Hormuz.

This diplomatic stagnation coincides with an immediate wave of physical supply as previously stranded Gulf vessels clear port backlogs, reinforcing a loose structural outlook where Morgan Stanley now projects an implied global surplus of 4.8 million bpd by 2027.

Compounding this bearish outlook, the EIA reported that US domestic crude production hit an all-time monthly record of 13.93 million bpd in April, driven by historic war-induced pricing. Immediate downside momentum was partially checked by tight domestic commercial inventories. The market is currently bracing for weekly storage data, with analysts forecasting a 4.5 million-barrel draw. If verified, this will mark the tenth consecutive week of contracting US inventories, matching a historical depletion record last observed in January 2018.

Written by: Aiman Haikal