Brent crude faces upward pressure as geopolitical tensions intensify around critical maritime chokepoints, according to Rabobank strategist Michael Every. The analyst warns that escalating conflict in the Hormuz Strait and Red Sea regions could drive Brent prices beyond the current USD 95.5 per barrel level while simultaneously widening crack spreads across refined petroleum products.
The warning comes as energy markets price in growing risk premiums tied to potential supply disruptions through these vital shipping routes. The Strait of Hormuz handles roughly one-fifth of global oil supply, while Red Sea tensions have already forced shipping diversions affecting global trade flows. Traders should anticipate increased volatility in energy derivatives and potential knock-on effects across inflation-sensitive instruments.
Refiners may benefit from widening crack spreads, though higher input costs could pressure margins for downstream consumers. Currency pairs tied to oil-exporting nations could see renewed support if prices climb further.
FXnCO Insight
Monitor long positions in energy commodities and oil-exporter currencies while hedging exposure to transport-dependent sectors vulnerable to rising fuel costs.
Source: FXStreet