Brent: Geopolitics keep risk premium elevated – Rabobank

Rabobank’s RaboResearch Global Economics & Markets team notes that Brent crude has firmed as markets weigh a fragile ceasefire between the United States and Iran and severe disruption in the Strait of Hormuz. The bank highlights constrained shipping flows, lingering security concerns and Iran’s effective control over the waterway as factors preventing a quick normalisation in Oil markets.

Hormuz disruption sustains Oil risk

"Near‑dated Brent crude edged up by $2 to $97, equity markets posted modest declines in Europe, whilst US stocks rose."

"Crucially, shipping through the Strait of Hormuz remains severely disrupted, with only a handful of Iran‑linked and/or Chinese vessels transiting the waterway."

"Iran indicated that it would allow no more than 15 ships per day to pass under the ceasefire agreement – hardly meaningful given that an estimated 800-900 vessels are still waiting to exit the strait."

"More fundamentally, the move underscores Iran’s effective control over the waterway, a message reinforced by the publication of “two safe shipping routes” by Iran’s Ports and Maritime Organization."

"This raises the risk that even once ships can leave the strait to deliver cargoes to Asia and Europe, owners may remain reluctant to re‑enter the area to load new shipments."

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