Key Moments
- Brent crude prices remained around $85-86 per barrel following an aggressive short squeeze, aligning with existing analyst expectations.
- Escalating Middle East tensions, including threats of strikes on Iranian infrastructure and concerns over key shipping routes, were cited as key supports for prices.
- U.S. engagement on regional energy routes, including backing for an Iraq-Syria pipeline as a Hormuz workaround, featured prominently in the strategic backdrop.
Brent Prices Consolidate After Sharp Short Squeeze
Rabobank strategist Michael Every observed that Brent crude prices have been steady in a narrow range of $85-86 per barrel after what he described as an aggressive short squeeze. According to Every, this price behavior is consistent with the outlook of Rabobank energy analyst Joe Delaura, who has maintained a neutral view on Brent despite ongoing market volatility and broader LNG market dynamics.
| Market Indicator | Latest Description |
|---|---|
| Brent crude price range | $85-86 per barrel |
| Price drivers cited | Short squeeze, Middle East tensions, U.S. sanctions enforcement, alternative pipeline efforts |
| Analyst stance | Neutral on Brent prices (Rabobank, via Joe Delaura) |
Geopolitical Risks Centered on Iran, Hormuz, and Regional Security
Every directly connected Brent’s current stability to persistent geopolitical risk in the Middle East, particularly around the Strait of Hormuz and surrounding trade routes.
He highlighted a series of developments and reports:
“Brent is still stable at $85-86, in line with our energy analyst Joe Delaura’s expectations, following the aggressive short squeeze just seen.”
“Yet President Trump is again threatening to hit Iranian power plants and bridges next week if no deal is reached; Axios reports that Trump just held a Situation Room meeting on massive new strikes that are wide enough in scope to force Tehran to back off in Hormuz; the Houthis might threaten the Red Sea after announcing Saudi airspace is not safe for overflight; and Israeli PM Netanyahu warned Iran if his country is attacked, the response will be a “decisive blow.””
U.S. Policy, Hormuz Exposure, and Pipeline Alternatives
Every also pointed to U.S. diplomatic and strategic moves that intersect with oil and LNG flows in the region, particularly regarding the vulnerability of the Strait of Hormuz and efforts to reduce reliance on it.
“Trump also just hosted Iraq’s PM for talks on a final US troop withdrawal set for end-September, Iran, and oil – where the US is supporting efforts to revive an Iraq-Syria crude oil pipeline as another Hormuz workaround.”
“Trump also dropped his 20% Hormuz toll in favour of GCC FDI pledges into the US.”
Every framed these steps in the context of broader questions about U.S. strategy and the role of Hormuz as a key chokepoint for energy shipments:
“So, if the US starts a war to control Hormuz but can’t, even if it gains during fighting as an LNG and helium exporter, why not then ensure the strait is not a chokepoint?”
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