Navigator: Middle East Energy: Fragile Calculus
Pivot: The week opened with hopes that the interim ceasefire would normalise trade flows. Exports appeared to recover temporarily, peaking at 14.5mn bpd on June 24.
Shock: The June 25 drone strike on the M/V Ever Lovely triggered an immediate rehardening of the Strait of Hormuz. Transit volumes fell by nearly 65% within 48 hours.
Inventory impact: The average weekly Me supply deficit of 8mn bpd (rising to 11mn bpd by the end of the week) continued to draw down OECD reserves. The IEA estimates current OECD crude inventories at 2.3bn bbl. as of June 2026, about 0.6bn bbl. below the “safe” level of 30 days of consumption. That leaves little margin for further disruption.
The downside for oil prices from US$75/bbl for Brent seems very limited at these levels. The upside is at least U$15/bbl if, as i expect, the US military, through no fault of its own, is not able to neutralise the IRGC and impose freedom of navigation in the Gulf.
The QS Wealth Preservation Portfolio has no position in oil for the moment. But I am thinking about it.
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