Situation Room: IG energy vs. oil prices

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Situation Room: IG energy vs. oil prices

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Situation Room

IG energy vs. oil prices

Credit Analysis

IG energy vs. oil prices 15 June 2026

With the potential Iran deal moving closer to reality, Brent oil is down -9% so far in June. Credit Strategy

That has not moved the relative value for the Energy sector spreads. We estimate United States

Energy currently trades 8bps tighter than the index, adjusting for rating and maturity. Cross Product

That’s just 1bps wider than in late May, despite the big decline in oil prices (Exhibit 1). Yuri Seliger

Credit Strategist

Continue to like Energy sector spreads BofAS+1 646 855 7209

We keep our overweight view on the Energy sector (both E&P as well as Midstream). yuri.seliger@bofa.com

That’s because ultimately IG spreads are about risks. For the Energy sector, the risk Sohyun Marie Lee

would be oil trading around $60/bbl or lower, which is when the sector typically trades at CreditBofAS Strategist

a discount relative to broader IG market (Exhibit 2). +1 646 855 7217

sohyun.lee@bofa.com

With the big depletion of oil reserves, reaching that level should be unlikely any time

soon. Our strategists forecast Brent oil averaging around $75/bbl during 2H-2026 in the

In this reportmost bearish “full reopening” scenario (Exhibit 3, Exhibit 4). Moreover, the sector

continues to provide a hedge for the scenario that the Strait takes a longer time to Daily supply snapshot

reopen than expected.

Daily dealer inventories update

Finally, for the Energy sector credits we like see High Grade E&P Quarterly: Record tight

E&P spreads justified by higher for longer oil price backdrop and High Grade Midstream Daily HG fund flows

Quarterly: Fundamentals solid amid growth cycle; record tight spreads are justified on