Brent crude has rebounded to nearly $80/bbl as geopolitical tensions triggered a short squeeze, while critically low inventories and tighter physical balances challenge glut expectations.
China has resumed refined fuel exports, secured 26 million barrels of Gulf crude for July-August, and helped cut Iranian floating storage in Asia by 50% as stranded barrels returned to market.
The end of the U.S. Iran waiver, tighter Russian diesel exports, and renewed Hormuz tensions are expected to tighten physical oil markets.
Brent crude’s recent rebound from $71 to $79 a barrel is not merely a brief short-covering bounce; it is the first tremor of an underlying structural deficit.
