Brent Futures Flip to Backwardation as Middle East Supply Risks Return
The Brent Crude futures curve flipped into backwardation this week, signaling expectations of tight prompt supply for the first time in a month, as the market started pricing in the renewed hostilities in the Middle East, collapsed tanker traffic through the Strait of Hormuz, and the reinstated U.S.
Source: OilPrice.com
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DW NOTE
Brent's shift to backwardation — near-month contracts priced above deferred — signals traders pricing immediate scarcity, not distant risk. The Strait of Hormuz has been largely blocked since February 28, and Iran still hasn't fully reopened it despite the June 17 ceasefire extension. When markets flip the curve, they're betting supply won't arrive when promised.