Rabobank’s strategist says current market pricing suggests the Iran conflict and any disruption in the Strait of Hormuz are being treated as largely settled. He sets out outcomes ranging from a broad US win over Iran by the second to third week of April to longer blockades and wider escalation, with some risks shown more in physical oil trades than in futures.
Australia is set to rely on more energy imports after a fire at one of its two oil refineries, in the context of repeated accidents at remaining western facilities. The article reports warnings of diesel shortages affecting mining activity and links this to reduced domestic refining capacity.
In Europe, Brussels warned EU states not to hoard fuel within their borders after earlier messaging that there was no risk of an energy crisis. It also reports that the European Commission is considering higher taxes on fossil fuels than on electricity to encourage a shift to renewables, while member states have moved the other way during the current crisis.
The article argues that these events add to longer-term worries about energy supply and pricing, and questions whether markets are capturing future geopolitical shifts. It states the article was produced using an AI tool and reviewed by an editor.
We are seeing oil futures markets price in a resolution to the Iran conflict by next week, with Brent crude pulling back to around $105 a barrel from its March 2026 highs. This seems disconnected from the physical reality, where the risk of a prolonged blockade of the Strait of Hormuz remains very high. The current calm in futures feels fragile, much like the brief stability we saw in late 2025 before this latest escalation.
This suggests that volatility itself is the asset to trade, as it appears significantly underpriced. With the CBOE Crude Oil Volatility Index (OVX) dipping below 40 despite the ongoing naval standoff, long-dated call options on WTI and Brent look attractive to hedge against a sudden supply shock. A bet on rising prices could pay off handsomely if the market is forced to confront a reality it has so far ignored.
We should also look beyond crude to refined products, particularly diesel. The recent fire at Australia’s Lytton refinery highlights a global refining capacity issue, with the country already importing over 90% of its refined fuel needs. This creates an opportunity in the crack spread, betting that the price of diesel will rise faster than the price of crude oil.
In Europe, we are seeing policy clash with necessity as Brussels pushes for higher fossil fuel taxes amid warnings of shortages. Recent Euroilstock data from early April 2026 showed middle distillate inventories at a 15-year low, making the region extremely vulnerable to any supply disruption. This political variable adds another layer of upward price risk that automated trading models might be missing.
