Brent crude futures are trading near the mid-$90s per barrel after retreating from a recent peak of $108, but Rabobank warns current pricing remains too optimistic given ongoing Iran conflict risks. Senior Macro Strategist Bas van Geffen notes the pullback from recent highs doesn’t adequately account for potential disruptions through the Strait of Hormuz, a critical chokepoint for global oil flows.
The assessment suggests markets are underpricing geopolitical risk despite continued tensions in the region. Traders and energy-dependent sectors should prepare for renewed volatility if Iran-related disruptions materialize. The Strait of Hormuz handles roughly one-fifth of global petroleum liquids, making any impediment to passage a significant supply risk.
Current Brent pricing appears to discount a best-case resolution scenario, leaving substantial upside exposure if conditions deteriorate. Energy importers and transportation sectors face particular vulnerability to sudden price spikes.
FXnCO Insight
Traders should maintain protective positions in oil markets and energy-linked currencies, as current Brent pricing around mid-$90s inadequately reflects Hormuz disruption risks that could quickly push crude back toward triple digits.
Source: FXStreet