Investors are running out of time to brace for true oil shock
Investors have not yet fully prepared for a potential sharp rise in physical oil prices, which are significantly higher than futures prices, despite disruptions from the Iran war affecting key supply routes like the Strait of Hormuz. The physical oil market reflects current supply constraints, with prices around $130 per barrel, while futures remain lower due to market optimism and AI-driven economic confidence. Experts warn that the window to brace for a sustained oil shock is narrowing, with implications for inflation, equities, and global energy markets.
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Open this photo in gallery:An India-flagged tanker unloads crude oil at a terminal in Mumbai, after transiting the Strait of Hormuz, on Thursday.Francis Mascarenhas/ReutersShareSave for laterPlease log in to bookmark this story.Log InCreate Free AccountIn thrall to an AI boom that has sent stocks to record highs and harbouring hopes of a short-lived Iran war, investors have yet to prepare for a doubling of physical oil prices. The window to do so may soon be closing.There are plenty of reasons for market confidence, largely centered on the artificial intelligence galaxy of hyperscalers, semiconductor makers and software developers and robust earnings growth. The S&P 500 hit fresh record highs on Thursday.
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