Overview
- Brent and WTI jumped into the mid‑$90s and high‑$80s respectively as markets reintroduced a significant near‑term geopolitical premium on oil.
- Visible tanker transits through the Strait of Hormuz have fallen sharply and the International Maritime Organization warned the route is too dangerous to cross, while Houthi forces have threatened blockades in the Red Sea.
- On Wednesday, U.S. forces conducted a reported 11th day of strikes on Iran and Iran launched retaliatory strikes on U.S. regional bases, actions that traders view as heightening the risk of sustained supply disruption.
- Market signals show tightening near‑term product availability: the Brent three‑month spread has widened materially and refinery crack spreads are at multi‑week records even as the EIA reported an unexpected weekly U.S. crude build and U.S. SPR stocks sit at multi‑decade lows.
- Rising oil has lifted energy equities and could feed into higher consumer fuel prices and tougher monetary policy choices, while longer‑term offsets include rising U.S. production, OPEC+ output moves, and stronger Russian exports that leave the outlook volatile.