Bernstein Energy: Let the oil flow

Research evidence excerpt

Bernstein Energy: Let the oil flow

17 June 2026

Asia-Pacific Oil & Gas

The US-Iran MOU (see link) is a constructive first step toward reopening flows Neil Beveridge, Ph.D.

+852 2123 2648 through the Strait of Hormuz, but uncertainty remains high. Operational details

neil.beveridge@bernsteinsg.com are still unclear, including the timing of vessel returns, availability and pricing of war-risk

insurance, and safety protocols for transiting ships. Minesweeping progress and oversight

Brian Ho, CFA also remain key unknowns. As a result, while flows are set to resume, physical trade is

+852 2123 2615

brian.ho@bernsteinsg.com unlikely to normalise quickly given lingering logistical and security constraints.

Kelvin Yuan, Ph.D., CFA Although execution risk remains, both sides have clear incentives to de-escalate. For

+852 2123 2612 the US, easing geopolitical tensions and stabilising oil prices ahead of midterm elections

kelvin.yuan@bernsteinsg.com is politically important. On the Iranian side, the war is increasingly costly, and a deal offers

a path to restore oil exports, access frozen assets, and stabilise the domestic economy.

Critically, an agreement also supports regime security, allowing the leadership and IRGC to

end the conflict while framing the outcome as a strategic win.

The oil market has already absorbed c.1bn bbls of supply shock through inventories.

We estimate a cumulative drawdown of ~1bn bbl globally, spanning ~300mmbbls from

SPR, ~450mmbbls from China inventories, ~140mmbbls oil-on-water, and the balance

from commercial stocks. This significant drawdown reinforces the importance of restocking

once supply flows stabilise.

We expect normalisation to take around six months. This reflects the time needed for