Oil markets remain surprisingly bearish despite ongoing disruptions in the Middle East, with traders betting on a diplomatic breakthrough. Physical oil markets remain tight, with the IEA estimating global production is still 9.4 million bpd below pre-war levels.
Despite continued hostilities in the Middle East and an expansion of the war to the Red Sea, oil traders have remained largely bearish on the commodity, betting on a quick peace deal.
Earlier this week, Brent crude sank below $80 per barrel, and WTI dropped below $75 after President Trump said peace talks between the United States and Iran had resumed.
Meanwhile, the Iranian parliament is discussing a bill to ban access to the Strait of Hormuz to U.S., Israeli, and other “hostile” vessels.
The latest news regarding supply restrictions has caught traders' attention, and oil prices have risen.
