ING analysts Warren Patterson and Ewa Manthey note that Brent Oil prices have risen sharply as tensions escalate in the Persian Gulf and transit through the Strait of Hormuz slows. They highlight that speculators have trimmed net long positions in ICE Brent despite higher prices. ING also cites IEA data showing rising global oil inventories and stresses that demand recovery and supply risks will depend on US-Iran developments.

Brent supported by Gulf tensions

"Oil prices are getting an additional boost this morning, with ICE Brent up around 4% at the time of writing amid increasing tensions in the Persian Gulf. It was another weekend of the US and Iran exchanging strikes."

"Despite the renewed hostilities between the US and Iran, the latest positioning data shows that speculators are still reluctant to jump into the oil market. Speculators reduced their net long in ICE Brent by 547 lots over the last reporting week to 55,087 lots as of last Tuesday."

"On Friday, the IEA's latest monthly oil market report showed the agency expects oil demand to gradually recover over the course of the year. The IEA forecasts demand in 2Q26 was down 4.8m b/d year-on-year."

"It’s expected to ease to a 1.7m b/d YoY reduction in 3Q26, before returning to 1.2m b/d YoY growth in the final quarter of the year. Much will depend on how rising tensions between the US and Iran play out."

"The agency estimates that global oil supply increased by 4.1m b/d in June. As a result, global oil inventories are estimated to have risen by 21m barrels in June, which would be the first increase in four months."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)