- Geopolitical risk premiums have significantly rebounded in a short period, driven by sudden news of the U.S. rejecting Iran's peace proposal. Brent crude oil futures surged by 3.99% in a single day to $105.33 per barrel, while U.S. West Texas Intermediate crude rose by 4.64% to $99.85 per barrel, reversing last week's sell-off trend due to ceasefire expectations.
- The ongoing blockade of the Strait of Hormuz has caused substantial disruption to the global energy supply chain. Saudi Aramco disclosed that the global crude oil supply loss has reached approximately one billion barrels over the past two months. The absolute contraction on the supply side has created an extremely tight spot market, with some risk-averse tankers forced to shut down tracking systems to maintain limited export volumes.
- The pricing focus of macro funds is shifting towards the subsequent developments in major power diplomatic games. The market is closely watching the upcoming visit of the U.S. President to Beijing. If relevant multilateral consultations fail to reach an effective consensus on restoring Middle East oil transport routes, the forward curve of the energy market may face further premium revaluation.
Revaluation of Risk Premiums and Amplification of Short-term Contract Volatility
The microstructure of the energy derivatives market is undergoing intense expectation swings. During last week's trading cycle, macro traders bet on an imminent diplomatic turning point in the ten-week-long Middle East conflict, with expectations of the resumption of shipping through the Strait of Hormuz prompting the two major benchmark crude contracts to record a weekly retreat of about 6%. However, the U.S.'s rejection of the peace proposal instantly shattered this optimistic assumption. Brent crude jumped more than four dollars in a single day, highlighting the current market's extreme sensitivity, where any official statement from Washington or Tehran can trigger algorithmic trading orders. This high-frequency volatility based on news indicates that crude oil pricing models are now entirely dominated by geopolitical factors, with traditional supply-demand balance sheets losing their ability to anchor prices in the short term.
The Physical Reality of the Global Crude Oil Supply Gap
Setting aside the short-term games of financial markets, the physical energy supply chain is under unprecedented physical pressure. The quantitative assessment by the CEO of Saudi Aramco regarding the loss of one billion barrels of crude oil supply in two months reveals the real destructive power of the Strait of Hormuz blockade. This is not merely a logistical delay but a substantial capacity blockade. Even if the conflict ends in the short term, the damaged infrastructure, soaring shipping insurance rates, and the redeployment of tanker capacity mean that the energy spot market will take months to return to normal. The current extreme transportation method of a few tankers shutting down automatic identification systems to avoid potential attacks further confirms the extreme vulnerability of Middle East oil export channels.
Feedback from Import Data of Major Asian Demand Countries
The physical blockade on the supply side has produced clear statistical evidence on the world's largest demand side. Data released by China's General Administration of Customs shows that crude oil imports in April fell sharply by 20% year-on-year to 38.5 million tons, the lowest level since July 2022. This deterioration in data is directly attributed to shipping delays and supply disruptions caused by the blockade of the Strait of Hormuz. As a key weight country in global commodity pricing, China's sharp decline in imports not only reflects physical bottlenecks but also suggests that as prices approach the high-pressure range of $110 per barrel, Asian refineries may passively resist by reducing operating rates or consuming strategic inventories. If this demand destruction effect becomes normalized, it will form a complex reverse drag on long-cycle oil prices.
Structural Evolution Expectations of the Forward Price Curve
When assessing the long-term impact of geopolitical shocks, investment banks' forward models are incorporating a lasting risk premium. ANZ Bank's analysis points out that even if the current severe spot shock gradually subsides in late 2026, the tail risk of the Strait of Hormuz disruption will be permanently embedded in the crude oil pricing formula due to the deep depletion of commercial inventories and the weakening of global policy coordination mechanisms. The institution expects that under the baseline scenario of moderate demand recovery and slow inventory rebuilding, Brent crude will struggle to fall below the $90 per barrel support line throughout 2026 and maintain a central position of $80 to $85 per barrel in 2027. This narrowing of the long-term structural discount requires macro investors to adopt a higher discount rate when allocating energy-related assets.
