M. Juan Szabo [1] y Luis A. Pacheco [2]
Published Originally in Spanish in LA GRAN ALDEA
In what could be described as “Realpolitik,” Iran and the U.S.—long-standing adversaries—decided to sit down and negotiate a way out of the armed conflict in the Middle East, setting aside principled rhetoric and prioritizing, at least for now, their economic and geopolitical interests.
Following the announcement of an initial peace agreement and ceasefire between the U.S. and Iran—which includes reopening the Strait of Hormuz and lifting the U.S. naval blockade in the Gulf of Oman to restore oil trade—markets declined. Israel’s persistent attacks against Hezbollah in Lebanon continue to challenge the stability of the truce and to influence negotiations to which it has not been invited.
Meanwhile, in Europe, the conflict between Russia and Ukraine continues to escalate. A massive Ukrainian drone strike against a Moscow oil refinery brought the war directly to the heart of Russia. In Évian (France),Western leaders gathered at the G7 Summit to address global volatility and support for Ukraine. In the U.S., the opening of the 2026 FIFA World Cup in North America—a mega sporting event unfolding under tight security arrangements amid a sensitive international political backdrop—has been marked by strict immigration controls and on-field results used as geopolitical proxies.
Geopolitical Fundamentals
Pressured by the approaching midterm elections, the collapse of the Iranian economy, the threat of inflation, and the risk of a global recession, the U.S. and Iran agreed to a 60-day ceasefire, during which they will negotiate a lasting peace agreement. Their primary short-term goal is to reopen the Strait of Hormuz and halt the downward spiral undermining the global energy system.
The memorandum of understanding between the U.S. and Iran was signed by President Donald Trump at the Palace of Versailles—more specifically, in the celebrated Hall of Mirrors, the same historic hall where the Treaty of Versailles was signed in 1919 to end the First World War. On the other side of the world, the same document was signed by Iranian President Masoud Pezeshkian and the Prime Minister of Pakistan, who served as mediators between the two countries.
In this new chapter, and judging by the text of the agreement, Iran appears to have emerged in a stronger position: free from oil sanctions, with assets and funds unfrozen, its sovereignty recognized, the U.S. blockade lifted, and the prospect of a $300 billion reconstruction fund. However, none of this is yet set in stone, and there remains a long road ahead, particularly regarding nuclear weapons.
The question remains whether there will also be a fund—albeit a smaller one—to compensate for the damage caused by Iran and its allies in Saudi Arabia, Qatar, Bahrain, Kuwait, Oman, and Israel.
The initial reaction of capital markets was broadly positive. Although the opening of negotiations in Switzerland was threatened by President Trump’s verbal volleys, at press time, there was talk of a breakthrough.
Many analysts hold little hope that the negotiations will lead to lasting peace in the region. On the contrary, an Iran emboldened by its demonstrated ability to disrupt transit through the Strait of Hormuz, and now with greater economic resources, represents a latent threat to regional stability.
· Greater capacity to suppress internal dissent.
· More resources to fund its international terrorist network.
· Greater ability to disrupt global energy flows.
Even so, reaching a negotiated agreement—setting aside the details and decisions made during the war—had become an international imperative. The goal is to restore dynamism to the global energy system through the free flow of oil and LNG across the Middle East, without chokepoints or strategic blockades.
Unsurprisingly, Israel appears dissatisfied with the way events have unfolded; despite having borne much of the risk of a war it prosecuted with precision, which it regards as existential. At the decisive moment, it was excluded from the negotiations and received nothing but reproach from President Trump and from Vice President Vance.
One of the most criticized aspects of the initial agreement is its pragmatic stance on human rights. Despite months of intense internal protests, violently suppressed by the Tehran regime—now formally led by the hardline faction under Mojtaba Khamenei—the Versailles text contains no condemnation of, or conditions related to, civil liberties or human rights. Activists warn that economic relief could provide the state apparatus with the resources needed to consolidate internal control and perpetuate repression. It is, in a sense, a repetition of the U.S. strategy in Venezuela, but without Washington’s guardrails.
Energy, Sanctions, and the Strait of Hormuz
The U.S.-Iran ceasefire opens a 60-day window to evacuate oil and LNG trapped in the Persian Gulf, while the thornier issues related to enriched uranium and Iran’s nuclear program are negotiated. However, despitethe initial announcements, the pace of vessel departures has been surprisingly slow. Against this backdrop, OFAC issued General License X on Monday, which authorizes a broad range of operations in Iran’s hydrocarbon industry.
With the situation between Israel and Lebanon hanging by a thread, Iran has attempted to reassert its authority over the Strait in the days following the memorandum. However, markets expect the long-awaited reopening sooner rather than later, judging by the collapse of oil futures.
Although the reopening of the Strait of Hormuz had not yet materialized and transit remained effectively restricted, the International Energy Agency (IEA) released a new report asserting that the global oil sector could return to surplus by the last quarter of 2026. According to the agency, a reduction in hostilities in the Middle East would allow lost supplies to return to the market.
The report projects average global oil demand of 103.3 MMbpd in 2026, representing a 1.1 MMbpd decline from 2025. It also forecasts that the main supply deficit is now behind us and that the world is heading toward a 5 MMbpd surplus by 2027. The IEA further estimates that global oil supply will grow by around 8 MMbpd to reach 110 MMbpd in 2027.
According to the agency, these surpluses could offer “a welcome relief to the market” and create an opportunity to replenish inventories or build new strategic reserves, as countries reassess their energy policies in light of the lessons of the crisis.
As has become customary, these projections differ substantially from those published by OPEC. In its June report, the cartel forecasts annual oil demand growth of 1.0 MMbpd in 2026 and 1.7 MMbpd in 2027. The divergence also extends to supply estimates: according to OPEC, production growth would not be sufficient to outpace demand.
The U.S., the world’s largest hydrocarbon producer, continues to have no material impact on the global balance. In line with the rest of the market, it is experiencing an unusually sharp decline in commercial crude inventories, coinciding with markedly low levels in the Strategic Petroleum Reserve. Changes in drilling activity, hydraulic fracturing crews, and production can best be described as stagnant on a plateau.
Russia, Ukraine, and the G7 Response
In Eastern Europe, the war between Russia and Ukraine retains the character of an intense war of attrition, marked by massive drone and missile strikes. Early in the week, Russia launched an offensive involving 70 missiles and more than 600 drones, killing at least 11 people and causing severe material damage, including a fire at Kyiv’s historic Dormition Cathedral.
Toward the end of the week, Ukraine reported new waves of attacks and claimed to have neutralized 92 of the 99 drones launched by Russia in a single night. In response, Kyiv deployed fixed-wing drones against the Moscow region on several consecutive days, setting fire to its main refinery and exacerbating fuel supply problems.
Russia claimed to have intercepted up to 157 Ukrainian drones across 14 regions in a single day. On the eastern front, it announced the capture of Yorkovka, further tightening the noose around the Ukrainian strategic strongholds of Sloviansk and Kramatorsk.
The G7 Summit in Évian, attended by Donald Trump, focused on the war in Ukraine and reflected a notable shift in the group’s dynamics, with renewed international resolve against Putin. According to French President Emmanuel Macron, there was significant convergence with the U.S. leader, who stated that “the occupied territories must be returned to the Ukrainians” and declared that Vladimir Putin shows no genuine willingness for peace. Trump also called on Russia to reach a deal to stop the massive loss of life at the front.
Taking advantage of the U.S.-Iran agreement to stabilize the Strait of Hormuz and global oil markets, G7 leaders agreed to sharply tighten sanctions on Russian oil and gas, with particular focus on the so-called “shadow fleet.” They also pledged to accelerate the delivery of air defense systems, such as Patriot interceptors, and long-range capabilities to protect Ukrainian cities. In addition, G7 members expressed willingness to issue licenses enabling Ukraine to scale up its industrial weapons production.
International pressure, sanctions, and strikes against oil infrastructure have taken a toll on Russia’s energy industry. The most significant effects include:
· Production below 9 million barrels per day (9.0 MMbpd).
· Limited exports due to terminal disruptions.
· Product shortages in the domestic market.
· Difficulties in the supply of fuels and raw materials for the defense industry.
During the same period, the formal opening of the first negotiating cluster—called “Fundamentals”—took place for the accession of Ukraine and Moldova to the European Union. This step consolidates their institutional integration into the West, despite warnings from the Kremlin.
China and the Global South
Meanwhile, China is intensifying its strategy of international coalition-building to counter Western influence. To host the upcoming BRICS+ group summit, advisors and diplomats in Beijing are advancing a reconfiguration of their global trade strategies.
The overriding objective is to reinforce multilateralism, shield itself against potential U.S. sanctions, and consolidate its financial weight in the Global South.
Price Dynamics
During the week of June 13–20, 2026, oil and natural gas markets reacted primarily to the U.S.-Iran ceasefire, which facilitated the partial reopening of the Strait of Hormuz. The de-escalation eased fears of scarcity that had inflated markets in previous months.
Brent crude gradually declined, closing the week at around $80.57/bbl on Friday, June 19, with a cumulative loss of over 8.5%. WTI followed a similar trajectory, contracting by approximately 10.5%, to settle at $77.33/bbl.
Natural gas also traded in a stabilizing pattern with mild corrections at its main trading hubs. In the European market (TTF), the benchmark price hovered around €42.06/MWh as of June 19.
In the North American market (Henry Hub), gas traded in a more stable range at around $3.37/MMBtu, pressured by continued growth in domestic production outpacing seasonal energy demand.
Venezuela
A Serialized Drama
In yet another chapter of the tropical drama that is Venezuela, Washington surprised observers by announcing that Dinorah Figuera would return to Venezuela at the “invitation” of the U.S. State Department. Dr. Figuera, the last president of the National Assembly elected in 2015 and, until recently, the head of the parallel interim government, met with the current government's authorities to agree on the institutional rules governingthe third stage of the Trump/Rubio plan: the transition.
In practice, the U.S. brought the 2015 opposition parliament—which asserts its original legitimacy and continuity—and the current Chavista legislature to the same table, with the goal of accelerating the democratic transition. Figuera and Jorge Rodríguez agreed to establish “a technical and political working group, with concrete milestones and timelines,” aimed at strengthening democracy, consolidating peace, and improving the welfare of Venezuelans, according to a National Assembly statement that offered few additional details.
A Trump administration spokesperson indicated that the agenda would include priorities such as rebuilding democratic institutions, strengthening the National Electoral Council (CNE), restoring guarantees for political participation, and protecting the civil liberties necessary for open political debate.
The exclusion of María Corina Machado and the Unitary Platform from the process, despite the Panama Manifesto, generated considerable comment and criticism on social media. Figuera explained that her role was strictly institutional: to agree on the ground rules for a free and broadly participatory political-electoral process. For Machado, the exclusion may prove advantageous, shielding her from potential entanglements.
The transition has accelerated because the constitutional six-month deadline for the interim government is approaching, with presidential elections not yet formally called.
During the first two stages of the U.S. plan—stabilization and recovery—there were efforts on the part of U.S. oversight in the economic sphere; however, the results remain limited, particularly due to a lack of coordination among the interim government’s agencies, despite a sharp increase in the availability of foreign currency during the stabilization phase.
The Central Bank of Venezuela (BCV) has accelerated the depreciation of the official exchange rate, such that, if the trend continues, the official rate and the so-called intervention rate could converge next month. However, whether that is the bank’s intention remains unclear. The gap with the parallel market remains uncontrolled, partly due to liquidity management, fueling an inflation that keeps prices beyond the reach of most Venezuelans. Any potential macroeconomic improvements have yet to translate into genuine improvements in living standards. At the close of the week, the official rate stood at 612 Bs./$.
During the recovery phase, numerous meetings have been held with key industry players, investors, and funds of various sizes, with whom letters of intent and memoranda of understanding (MOUs) have been signed. To date, these agreements have laid bare the lack of an institutional framework, transparency, and clear rules governing the process.
The deadline set in the new Hydrocarbons Law (LOH) for adapting existing contracts to its requirements falls in early July. To date, no contract has been signed under the new negotiated fiscal terms, delaying any additional investment in the coming months.
Reports also indicate that Delcy Rodríguez held meetings with U.S. oil companies ExxonMobil and ConocoPhillips to explore their return to Venezuela, as well as with Indian conglomerate Reliance regarding the placement of Venezuelan crude at its refineries. However, none of these talks has translated into investment decisions, raising doubts about the ability to raise oil production to the levels required for an eventual restructuring of external debt.
In short, the U.S. State Department appears to be firmly setting the terms of its engagement: it is pressing for legal, fiscal, and human rights reforms through control over the flow of funds, energy, and regulatory agreements, the release of political prisoners, and now, the launch of an institutional transition.
In this magical realism that is Venezuela, there exists a government that is little more than a fiction, since the decisions that matter are made from the north. Yet the expected results leave much to be desired, owing to the continued grip of the traditional Chavista wing, internal disorganization, a lack of transparency, and the opacity of processes designed to preserve past privileges throughout the transition.
Petroleum Operations
Production remained essentially flat during the first half of June. Output averaged 931 Mbpd in the last week, distributed geographically as follows:
· West 252
· East 111
· Orinoco Belt 568
TOTAL 931
Production details for the most significant operators and the largest Joint Ventures (JVs) in the Orinoco Belt are as follows:
· Chevron: 261 Mbpd
· Repsol: 50 Mbpd
· M & P: 29 Mbpd
Other joint ventures in the Orinoco Belt closed the month of May with the following average production figures:
· Sinovensa: 98 Mbpd
· PetroRoraima: 32 Mbpd
· PetroMonagas: 97 Mbpd
· PetroCedeño: 85 Mbpd
National refineries processed 270 Mbpd of crude and intermediate products, yielding 80 Mbpd of gasoline and 78 Mbpd of diesel.
No changes were reported in the activity of the three petrochemical complexes.
Monthly exports, based on the first half of the month, are on track to reach 750 Mbpd of crude and 50 Mbpd of residual fuel.
The Venezuelan crude basket averaged $83.2/bbl, in line with the decline in international prices.
[1] International Analyst
[2] Nonresident Fellow Baker Institute
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