Key Moments
- Brent prices have moved sharply higher as tensions rise in the Persian Gulf and traffic through the Strait of Hormuz slows.
- Speculative net long positions in ICE Brent were reduced by 547 lots to 55,087 lots as of last Tuesday, despite the price rally.
- IEA data show a 4.1m b/d increase in June global supply and a 21m barrel rise in inventories, alongside an outlook for gradual demand recovery later in the year.
Geopolitical Risk Drives Brent Higher
ING analysts Warren Patterson and Ewa Manthey report that Brent Oil prices have surged as tensions intensify in the Persian Gulf and shipping activity through the Strait of Hormuz slows. They note that the latest upswing in prices has been closely linked to security concerns in this key transit corridor.
“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.”
Speculators Cut Net Longs Despite Rally
According to the ING analysts, positioning data indicate that speculative investors have remained cautious even as prices rise. Rather than adding to bullish bets, market participants have trimmed exposure in ICE Brent futures.
“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.”
| Metric | Latest Detail |
|---|---|
| ICE Brent price move | Up around 4% at the time of writing |
| Change in ICE Brent net longs | -547 lots over the last reporting week |
| Total ICE Brent net longs | 55,087 lots as of last Tuesday |
IEA Outlook: Demand Recovery and Supply Build
ING also references the latest monthly oil market report from the International Energy Agency, released on Friday, which outlines expectations for a gradual improvement in oil demand and a recent increase in supply and inventories.
“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 IEA data also point to a notable expansion in global supply and stockpiles in June.
“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.”
| IEA Indicator | Figure | Context |
|---|---|---|
| 2Q26 demand change | -4.8m b/d YoY | Year-on-year decline |
| 3Q26 demand change | -1.7m b/d YoY | Expected year-on-year reduction |
| 4Q26 demand change | +1.2m b/d YoY | Expected return to growth |
| Global supply change in June | +4.1m b/d | Month supply increase |
| Global inventory change in June | +21m barrels | First increase in four months |
Market Balance Hinges on US-Iran Developments
ING underscores that the path of demand recovery and the scale of supply risks are closely tied to how the situation between the US and Iran evolves. The analysts highlight that both the price support from heightened geopolitical risk and the cautious stance of speculators are unfolding against the backdrop of rising inventories and the IEA’s outlook for improving demand later in the year.
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