Rabobank Warns Iran Conflict Could Reshape Oil Prices

Key Moments

Rabobank Scenario: From Single Benchmark to Fragmented Energy Blocs

Rabobank’s RaboResearch group, led by Michael Every and Joe DeLaura, examines how the Iran War could hasten a break from globally integrated oil markets toward more fragmented pricing blocs. Their work points to previous periods of divided energy and foreign exchange markets as a reference and underlines that the current discussion is intended as scenario analysis rather than a definitive prediction.

The authors suggest that the traditional notion of one unified global oil price may be challenged as governments and companies adjust supply routes and commercial relationships in response to geopolitical stress. They argue that energy flows could increasingly be directed by political and security priorities rather than pure market forces.

Energy as a Strategic Asset, Not a Homogeneous Global Commodity

The research notes that existing disruptions linked to the Iran War are already influencing supply chains and that further reconfiguration is likely once the conflict concludes. The team emphasizes that this dynamic applies irrespective of the conflict’s outcome.

“Whether the US wins or loses the Iran War, energy supply chains are already moving because of it, and after it is over they are likely to shift significantly further – we are just flagging that Balkanisation is one of the risks ahead.”

They argue that the market may be transitioning away from seeing energy as a uniform, freely tradable asset that always flows to the highest bidder in a neutral global marketplace.

“As such, we may be moving towards a world where energy is not a fungible number on screens that flows to the highest bidder in a neutral global market, but a strategic asset that moves through geopolitically-constrained supply chains based on security pacts, payment currencies, and swaplines, as for large parts of the 20th century for many economies, and others as of today.”

Possible U.S. Response: Closed-Loop Energy Arrangements

Every and DeLaura outline one potential geostrategic path for the United States in the face of prolonged disruption. They argue that Washington could reassess its export policy for refined products and consider a tighter alignment with selected energy producers and refiners.

“We contend one geostrategic option the US could consider is to halt exports of refined products. Moreover, the US may respond to an extended energy crisis by corralling key energy producers and refiners into a closed loop –like the Soviet COMECON bloc– within which they could enjoy abundant cheap energy, while others would risk seeing vastly greater shortages and price rises.”

The analysts point out that such a structure would likely create significant disparities in energy access and pricing between countries inside and outside the closed loop.

Regional Groupings and the Role of NAPHTHA

The report observes that NAPHTHA-linked energy structures offer clear benefits for some participants. However, the authors argue that U.S. strategic priorities would limit the extent of any exclusivity regarding key allies in Asia-Pacific.

“The energy advantages of NAPHTHA are clear but it’s highly unlikely the US would abandon Japan, South Korea, and Australia/New Zealand for national security reasons. Even a grouping involving those net energy deficit economies has roughly balanced oil demand and excess LNG.”

This suggests that U.S.-aligned energy clusters could still include major net importers, with intra-bloc balances potentially supported by liquefied natural gas flows.

China’s Challenge in Building a CNY-Denominated Energy Stack

The RaboResearch team also looks at the implications for China if it seeks to establish a separate energy ecosystem centered on the CNY. They quantify the scale of crude supply needed to support such a structure.

“Equally, if China wants to find a new CNY energy ‘stack’ for itself then it needs to source around 10.5 million barrels per day of crude. That’s around the total produced by both Saudi and Russia together.”

This underscores the magnitude of supply that would be required for China to underpin a distinct, currency-linked energy bloc.

Potential Bloc Structures and Supply Requirements

Based on the analysis presented, any move toward energy blocs would likely hinge on crude oil volumes, LNG capacity, and the alignment of security and currency frameworks. The discussion highlights two key quantitative reference points provided in the report: crude volumes associated with a potential Chinese CNY energy structure and the concept of roughly balanced oil demand and excess LNG in a U.S.-aligned grouping that includes major Asia-Pacific allies.

Analytical Nature of the Outlook

The authors repeatedly characterize their work as a risk-oriented scenario rather than a definitive baseline. They frame the potential for energy Balkanization as a possibility arising from evolving geopolitical conditions tied to the Iran War, with implications for both energy pricing and the structure of FX markets.