Brent futures have moved sharply on US\u2013Iran conflict news and recently rebounded to $95\/bbl. Physical supply remains tight, with shipping through the Strait of Hormuz severely constrained.<\/p>\n
OPEC supply is estimated to have fallen by about 42% in March, with a similar drop expected in April. The base case assumes output starts to recover in May but does not fully return to normal for around nine months.<\/p>\n
Across five major Middle East energy crises since 1956, supply normalisation took close to eight months on average. Expectations for Persian Gulf flows have shifted to slower improvement by mid\u2011May rather than late April.<\/p>\n
The end\u20112026 Brent forecast has been revised from $79\/bbl to $85\/bbl based on the slower path for supply to recover. Full normalisation is assumed only towards the end of 2026.<\/p>\n
Even if hostilities end by late April, global inventories are not expected to start a sustained move back towards normal until late May at the earliest. Factors cited include shut\u2011ins, shipping limits, insurance constraints, port damage, and debris clearance.<\/p>\n
We should look past the daily price swings driven by conflict headlines, which recently pushed Brent to $95 per barrel. The physical market is extremely tight due to severe logistical constraints in the Strait of Hormuz, with shipping insurance premiums reportedly tripling in the last month alone. This underlying tightness suggests that any price dips may be short-lived opportunities.<\/p>\n
We are seeing a significant supply shock, with an estimated 42% drop in OPEC supply last month and a similar decline expected for April. Recent tanker tracking data confirms this, showing OPEC seaborne exports are down by over 4 million barrels per day so far this month. This is not a theoretical problem; barrels are actively being removed from the market right now.<\/p>\n
History shows that unwinding these disruptions is a slow process, with past Middle East energy crises taking an average of eight months to normalize supply. Our base case is now a nine-month recovery period, meaning we won’t see full production return until early 2027. This suggests that betting on a quick return to lower prices is a high-risk strategy.<\/p>\n
Global inventories are unlikely to start rebuilding until late May at the earliest, and recent data supports this view. For instance, the latest government reports show U.S. commercial crude inventories have drawn down by over 15 million barrels in the past four weeks, a rate far exceeding the seasonal average. These draws confirm that demand is outpacing the currently constrained supply.<\/p>\n
Given the revised end-of-year forecast towards $85 per barrel, traders should consider positioning for sustained or higher prices. The current environment favors strategies that benefit from this upward price pressure, such as buying call options or establishing bull call spreads. These positions can capitalize on the slow supply normalization expected through the second half of the year.<\/p>\n","protected":false},"excerpt":{"rendered":"
Brent rebounds to $95 as US\u2013Iran conflict disrupts Hormuz shipping; OPEC output plunges, normalisation delayed into 2026.<\/p>\n","protected":false},"author":38,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[46],"tags":[],"class_list":["post-45387","post","type-post","status-publish","format-standard","hentry","category-live-updates"],"acf":[],"aioseo_notices":[],"featured_image_src":null,"featured_image_src_square":null,"author_info":{"display_name":"josephine","author_link":"https:\/\/www.vtmarketsglobal.com\/en\/author\/josephine\/"},"_links":{"self":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts\/45387","targetHints":{"allow":["GET","POST","PUT","PATCH","DELETE"]}}],"collection":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/users\/38"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/comments?post=45387"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts\/45387\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/media?parent=45387"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/categories?post=45387"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/tags?post=45387"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}