Rabobank strategist Michael Every warns that escalating conflict around Hormuz and the Red Sea could push Brent above its current USD 95.5 level and widen crack spreads further. Every argues neither the United States (US), Israel, Iran nor Gulf Cooperation Council (GCC) can sustain a prolonged all‑out war, limiting the duration of any spike. However, the crisis’s resolution path remains highly uncertain.

Middle East escalation and Brent risks

"If we see military escalation, it’s likely to drive energy prices even higher than the $95.5 level Brent was at this morning with benchmark crack spreads at $68."

"However, it’s unlikely to last long."

"Neither the US nor Israel, nor Iran, nor the GCC can sustain a no-holds-barred war for long – and the world economy obviously can’t either."

"As such, we may be close to the beginning of the end of this crisis - it’s just unclear if it will prove a bridge too far for the US or Iran."

"On that note, after Kazakhstan was forced to stop piping oil via the Black Sea due Ukraine’s drone attacks, the EU is launching a mission to board Russian shadow fleet ships in the Indian Ocean; however, Russian LNG is to remain exempt from EU sanctions - realpolitik or real weakness?"

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