Shares of the United States Brent Oil Fund dropped 3.5% to $41.07 on June 24, extending a punishing week that has erased nearly $3 from its price in six trading sessions, as diplomatic breakthroughs in the Middle East rapidly dismantled the geopolitical risk premium that had been propping up crude prices. Brent Oil Fund Plunges Below $41 as Peace Talks and a Supply Flood Rewrite the Crude Playbook — Is the Worst Over or Just Beginning?
Shares of BNO cratered 3.5% to $41.07 on Tuesday, capping a brutal stretch that has wiped roughly 6.4% off the fund's value in just six sessions. The culprit is a one-two punch: a vanishing war premium in the Middle East and a wall of new supply heading into the market. For holders of this Brent-crude-tracking fund, the question is whether the floor is anywhere in sight.
A Peace Deal Is Pulling the Price Crutch Out From Under Oil
On June 17, President Trump and Iranian President Masoud Pezeshkian signed the Islamabad Memorandum to end the war between both countries and Israel.
The framework includes a 60-day ceasefire window, reopening the Strait of Hormuz to commercial shipping, and discussions on sanctions relief and possible release of up to $25 billion in frozen Iranian assets. That de-escalation is dissolving the fear premium that had kept Brent above $100 as recently as early June. On June 1, Brent was $96.42 per barrel ; by June 23 it had crashed to around $77. Every dollar off Brent flows almost directly into BNO's net asset value.
Iranian Barrels Are Already Flooding Back
Washington granted Iran a 60-day license to sell oil on international markets, and Iran shipped more than 30 million barrels over the past week alone — volumes not seen since before the conflict. A full reopening of the Strait of Hormuz could release about 80 million barrels into the market. That is real, physical supply landing on a market already softened by weak demand.
OPEC+ Is Adding Fuel to the Fire
Seven OPEC+ nations will add another 188,000 barrels per day starting in July, with Saudi Arabia and Russia each contributing 62,000 bpd, on top of nearly 600,000 bpd added between April and June.
Goldman Sachs cut its Q4 Brent forecast to $80 from $90 and expects Persian Gulf exports to return to pre-war levels by end of July.
The Fragile Wild Card: Nuclear Talks Could Still Collapse
Although the risk premium has been suppressed, it has not disappeared; stalled talks or an escalation in the Middle East could reverse market sentiment at any time.
The U.S. and Iran were in dispute Tuesday over whether Tehran had agreed to allow U.N. inspectors to view bombed nuclear sites. If diplomacy unravels, crude could snap back violently. Analysts see a base case of Brent finding support at $76–$77, with a temporary equilibrium in the $72–$77 range — meaning BNO may have more room to fall before stabilizing.