M. Juan Szabo [1] y Luis A. Pacheco [2]
Published Originally in Spanish in LA GRAN ALDEA 
By the end of the week, the geopolitical situation in the Middle East stood between the prospect of a peace agreement and, following the severe bombing campaigns and missile exchanges that took place between June 8 and June 13, 2026, the risk of a full-scale war.
The extreme violence of recent days and the need of both sides to bring the conflict to an end appear to have accelerated diplomatic efforts. After a series of conflicting statements from both camps, these efforts culminated on Sunday in a ceasefire agreement. Although far from a definitive solution, the agreement eases tensions and establishes a sixty-day period during which a more durable arrangement may be negotiated.
Analysts from The New York Times and international agencies note that, while Washington is pushing to end the conflict in support of its domestic policy agenda, the Israeli government continues to view Iran as an existential threat and could act unilaterally if it concludes that Tehran’s concessions regarding its nuclear program are insufficient.
The international community is cautiously optimistic that the truce—expected to be formally signed in Geneva later this week—will hold. However, concerns remain that renewed hostilities could reignite large-scale bombing campaigns, including Israeli operations in Lebanon. Against this backdrop, markets have increasingly priced in the likelihood of a successful agreement. As more crude oil moves through the Strait of Hormuz under military protection, oil prices have fallen to their lowest level in two months.
GEOPOLITICAL DEVELOPMENTS
Following a Hezbollah rocket attack and retaliatory Israeli airstrikes in Beirut, Iran broke the fragile ceasefire by launching missiles and drones toward Israel, most of which were intercepted. Israel responded by striking several Iranian cities, including Tehran, as well as petrochemical facilities. Iran then targeted Israeli military positions and launched attacks against U.S. and allied interests in the Persian Gulf, including Kuwait, Bahrain, and Jordan.
The Islamic Revolutionary Guard Corps (IRGC) closed the Strait of Hormuz and shot down a U.S. helicopter in Omani airspace. In response, the United States carried out precision strikes against Iranian air-defense systems and naval assets, triggering a dangerous escalation and renewed concerns about a global energy crisis.
Hours after threatening to destroy refineries on Khark Island, President Trump announced on June 11 that additional bombing campaigns would be suspended due to significant progress in high-level negotiations. A fourteen-point peace proposal was drafted in Islamabad, seeking to bring an orderly end to what Washington referred to as the “12-Day War.”
A comprehensive 60-day ceasefire was eventually announced, including the Lebanese front, together with the lifting of the U.S. naval blockade and the reopening of the Strait of Hormuz. Negotiations concerning Iran’s nuclear program were deferred to a second phase. Discussions regarding sanctions relief were also reported. Oil prices reacted sharply, with Brent crude falling below USD 90 per barrel.
CRUDE OIL MARKET BALANCE
Last week, we examined why the balance between supply and demand was not as fragile as many assumed following the closure of Hormuz and the disruption of Gulf shipping routes.
According to Kpler, approximately 136 million barrels of non-Iranian crude transited the export routes through Hormuz and the Gulf of Oman between early April and June 10. While average volumes were around 1.9 million barrels per day, recent traffic levels have approached 3.0 million barrels per day.
Despite International Energy Agency estimates suggesting a loss of 14 million barrels per day of Gulf supply, our calculations indicate a more moderate reduction of roughly 6 million barrels per day. Iraq continues to export close to 3 million barrels per day, Kuwait has recovered to more than 1 million barrels per day, and alternative pipeline routes have limited the impact on Saudi Arabia and the UAE.
Additional factors include increased U.S. exports, the release of 380 million barrels from strategic reserves, and weaker Chinese demand. Conversely, declining Russian production continues to tighten the balance. The effective supply deficit, as reflected in inventory movements, is currently estimated at approximately 2 million barrels per day.
PRICE DYNAMICS
Oil prices rose early in the week amid clashes between Iran and Israel and surged again after U.S. strikes on Iranian facilities. However, sentiment reversed sharply following the announcement of a ceasefire brokered with the support of Pakistan and Qatar.
By the end of the week, Brent and WTI crude benchmarks had declined roughly 6% compared with the previous week’s close. At the time of writing, prices had fallen further to USD 82.96 per barrel for Brent and USD 80.30 per barrel for WTI.
Natural gas markets also weakened. In the United States, Henry Hub prices fell more than 3% to below USD 3.10/MMBtu, while Europe’s TTF benchmark declined nearly 6% to EUR 46.78/MWh.
VENEZUELA
THE LAW OF THE JUNGLE: “NIÑO GUERRERO” ELIMINATED
President Trump announced that, under his direct instructions, U.S. Southern Command carried out a lethal kinetic operation that eliminated Héctor Rusthenford Guerrero Flores, known as “Niño Guerrero,” leader of the Tren de Aragua criminal organization, reportedly in Bolívar State.
The operation underscored the continued erosion of the Venezuelan authorities' territorial control. The interim government subsequently confirmed Guerrero’s death, stating that the operation involved intelligence sharing and engagements with criminal groups operating in the area.
POLITICAL AND ECONOMIC SITUATION
Venezuela continues to face profound institutional challenges. The extension of the economic emergency decree, discussions regarding external debt restructuring, diplomatic tensions, persistent inflationary pressures, and social demands linked to inadequate public services remain key issues.
Following Nicolás Maduro's departure, the new governing structure is seeking both domestic legitimacy and international recognition while managing pressure from Washington and internal opposition groups organized around the Panama Manifesto.
The Central Bank of Venezuela reported a monthly inflation of 6.3% in May, the lowest figure in nineteen months. Nevertheless, independent analysts estimate annual inflation at over 600%, continuing to erode household purchasing power.
HYDROCARBON INVESTMENT AND EXTERNAL DEBT
Efforts to attract investment into Venezuela’s hydrocarbon sector continue to be hampered by weak institutional frameworks, uncertainty surrounding Production Participation Contracts, OFAC licensing requirements, and unresolved fiscal issues.
Without transparent and sustainable arrangements regarding royalties, income taxes, and the overall fiscal burden, attracting large-scale investment will remain difficult. As a result, production growth is likely to remain below potential, limiting the country’s capacity to generate revenue and renegotiate its external debt obligations.
The interim government is promoting a broad refinancing process involving more than USD 70 billion in defaulted bonds, additional liabilities, arbitration awards, and accumulated obligations owed to international creditors.
INTERNATIONAL AGREEMENTS
Shell signed an agreement with PDVSA to develop the Loran Field in the Deltana Platform. Gas produced from the project will supply Trinidad’s LNG facilities and petrochemical industry. This development complements the Dragon Field project north of Paria, which is also being developed with Shell.
Schlumberger’s president visited Venezuela during the week, and agreements were reportedly signed relating to the country’s geoscience data systems. Trafigura also held meetings in Caracas, likely focused on its role as a major exporter of Venezuelan crude.
OIL OPERATIONS
According to OPEC secondary sources, Venezuela produced 1.072 million barrels per day in May, up 36,000 barrels per day from the previous month. Our estimates remain lower due to methodological differences involving condensates, diluents, and field adjustment factors.
Production improved during the week as electricity shortages affecting oil fields were partially resolved.
Estimated production by region:
Western Region: 252 Mbpd
Eastern Region: 112 Mbpd
Orinoco Belt: 565 Mbpd
Total: 929 Mbpd
Refineries processed approximately 266 Mbpd of crude oil and intermediate products, yielding 79 Mbpd of gasoline and 78 Mbpd of diesel fuel.
The José Petrochemical Complex continues to operate despite natural gas constraints, producing methanol, ammonia, and urea. Exports remain broadly on schedule despite loading-pump issues at the José terminal.
The average price of the Venezuelan crude basket was USD 86.1 per barrel.
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