Brent opened the month trading at $62.49/bbl, a level not seen since early 2022. Weak Chinese industrial output and ongoing market apprehension over global trade tensions weighed on prices. However, as the month progressed, fundamentals improved. By 11th June, Brent had rebounded to $67.87/bbl, driven by a stronger-than-expected draw in U.S. crude inventories and seasonal upticks in fuel demand. On the 12th June Israel launched a series of strikes targeting Iran’s nuclear and military facilities, Brent surged 10%-to-five-month highs. As the conflict between Israel and Iran escalated oil benchmarks increases as a risk to oil supply was priced in. Following the U.S. airstrikes on Iranian nuclear facilities that initially reignited fears of retaliatory action in the Strait of Hormuz a tentative US-led ceasefire between Iran and Israel was established. Although a ceasefire agreement was brokered markets continued to price in a regional risk premium amid fears that tensions could re-escalate.
Sterling delivered a strong performance in June, appreciating steadily against the U.S. Dollar and highlighting the market’s shifting interest rate and macroeconomic expectations. The pound opened the month at $1.3485 and reached a high of $1.3733 on 26th June, before consolidating slightly to close around $1.3704 by month-end. Domestically, resilient employment and wage growth data underpinned expectations that the Bank of England would adopt a more gradual approach to rate cuts compared to the Federal Reserve and European Central Bank. UK core inflation also remained above target in May, further reinforcing the case for holding rates steady in the near term Meanwhile, the U.S. Dollar came under pressure as softer retail sales and slowing industrial production signalled waning consumer momentum. Investor sentiment shifted in favour of non-dollar currencies, especially after Fed policymakers hinted at a potential pause in monetary tightening amid growing recession concerns. Additionally, a temporary de-escalation in geopolitical risk helped improve global risk appetite, further benefiting the pound at the expense of the safe-haven dollar.
Saudi Arabia remained central to longer-term price sentiment. Following weaker oil revenue figures, the Kingdom reaffirmed its commitment to Vision 2030 public investment plans but also signalled a reassessment of fiscal priorities. Analysts interpreted this as an early indication that Riyadh could push for deeper OPEC+ market intervention later in 2025 should prices remain below fiscal break-even levels.
