Global Energy Weekly: The crude reality of oil markets

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Global Energy Weekly: The crude reality of oil markets

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Global Energy Weekly

The crude reality of oil markets

Brent is trading at $86, but this is not the right metric 15 July 2026

With news of the US reimposing a blockade on Iranian ports, Brent crude has jumped Commodities

above $85/bbl, slightly above the average price of the past five years. Is there anything Global

to worry about? Before crude prices rebounded this week, other key metrics within the Global Commodity Research

petroleum complex, such as middle distillate & gasoline cracks in the US & Europe, were BofA Europe (Madrid)

already showing signs of stress. The reality of the oil market is that, despite a massive Francisco Blanch

supply disruption in the Middle East & Ukrainian attacks on Russian energy assets, crude Commodity & Deriv Strategist BofA Europe (Madrid)

is relatively well supplied due to strategic inventory releases & low refinery run rates +34 91 514 3070

(i.e., demand). However, refined product cracks are at or near record levels, suggesting Rachel Wiser

that a price breakdown could be around the corner. What are the key risks ahead? Commodity Strategist BofAS

+1 646 743 4069

Several price breakdowns are possible at this juncture Noah Hungness

First, if tensions do not abate for weeks, Brent could reset again above $100/bbl. But if Commodity Strategist BofAS

Hormuz instead reopens in a few days, crude supplies could overwhelm refineries, noah.hungness@bofa.com

resulting in a oil price slump. Second, if OPEC+ supplies exceed demand & refineries Clifton White

struggle to come back online, record-high gasoline & diesel cracks may be required to CommodityBofAS Strategist

entice China or others to allow fuel exports again.