Key developments driving the market:

• Satellite imagery showed no tanker activity near Iran’s Kharg Island, signaling a prolonged disruption at the country’s main oil export hub.

• The Strait of Hormuz has effectively remained closed for over 10 weeks, severely impacting global crude, LNG, and fuel flows.

• President Donald Trump stated that Iran would not be a major focus during upcoming talks with Chinese President Xi Jinping, with trade expected to dominate discussions.

• Despite White House reassurances, US gasoline prices have surged to their highest levels since 2022, increasing political pressure ahead of midterm elections.

• Analysts warn that even if diplomatic progress emerges, physical oil supply normalization could take much longer than futures markets anticipate.

• Asian economies are facing growing energy stress, with Japan actively seeking alternative crude supplies outside the Middle East, including purchases from Mexico.

• Trading volumes in Brent futures have cooled sharply this week after extreme volatility earlier in the month.

What’s Next?
The market increasingly looks like it is transitioning from a short-term geopolitical shock into a longer-term structural supply issue. Even if headlines temporarily calm sentiment, the physical disruption to energy flows may keep oil prices elevated for much longer than many investors currently expect.