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Brent: Energy risks rise with Hormuz tensions – Rabobank

Rabobank’s RaboResearch Global Economics & Markets team highlights that Brent Oil trading near $90 and elevated crack spreads underscore tight energy conditions as geopolitical risks escalate around Iran and Hormuz. The report notes shipping disruptions, IRGC threats to block flows, and potential US sanctions on buyers of Russian and Iranian energy, all reinforcing a fragile outlook for Oil markets.

Hormuz disruptions keep Oil markets tight

"With Brent oil over $90 this morning (now $89) and crack spreads near $70, so diesel is around $160 in effective terms, energy markets are far from comfortable - because we are drifting away from the geopolitical scenario where the US can 'Comfortably Bomb' Iran."

"Meanwhile, nothing much seems to be moving through Hormuz to mitigate. More ships have been hit, and few appear willing to brave passage. The IRGC has now pledged "not a drop" of energy will pass the strait - so a lot of energy is now building up inside Hormuz again waiting for another break in fighting."

"In which case, Iran must surely know that another MoU will open the door to it losing even more energy leverage. Bear that in mind as the headline flashes by that Iran says a dialogue with the US is ongoing despite current clashes, that Tehran will pursue diplomacy and war to advance its interests, and that Pakistani mediators are busy once again."

"For now, there's recognition that Hormuz is going to be trickier than hoped for longer."

"As if that were not enough for markets, Trump wants to add Iran to a congressional bill that will slap sanctions on those who buy Russian (and now Iranian) energy."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

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The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

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