Oil Futures Underestimate Hormuz Shock, Oil Prices May Soar

Oil futures have not fully priced in the ongoing Hormuz-related supply shock; while futures are up about $30 vs February, they remain $20-30 below some physical cargoes trading around $130-$150 per barrel, indicating the physical market is tighter than the futures curve suggests. If the Strait of Hormuz remains closed, prices could surge toward $150-$200 per barrel into the summer, and it could take months to restore flows (and years to repair damaged upstream/downstream infrastructure). Analysts warn the optimism around a quick reopening may blind markets to the scale of the disruption.