ING analysts Warren Patterson and Ewa Manthey note that Oil has posted only modest gains despite renewed US–Iran tensions and elevated risks in the Strait of Hormuz. They argue the market remains complacent about Persian Gulf supply recovery, with speculative net longs in ICE Brent cut to the smallest since December 2025, leaving downside momentum intact.

Speculators cut Brent exposure further

“The oil market has seen only modest gains this morning despite the re-escalation between the US and Iran over the weekend. Even so, we continue to believe the market is too optimistic about the timeline for a recovery in Persian Gulf supplies.”

“All this demonstrates that there’s still plenty of risk facing the oil market. Even so, participants appear to be shrugging off these developments, instead focusing on what a continued recovery in oil flows would mean for the global balance. This complacency is odd and clearly leaves significant upside risk if the supply recovery proves slow – or if we see significant re-escalation.”

“While the oil market is technically in oversold territory, momentum appears to still be to the downside.”

“The latest positioning data shows that speculators reduced their net long in ICE Brent by 23,790 lots over the last reporting week, leaving them with a net long of 90,338 lots as of last Tuesday. This is the smallest position that speculators have held since mid-December 2025, when the market was fully focused on the 2026 surplus expectations.”

“The gasoil crack continues to find good support. Noise around the potential for Russia to temporarily ban diesel exports is building amid a fuel shortage in the country following continued Ukrainian attacks on Russian energy infrastructure. Russia is a substantial diesel supplier, exporting around 900k b/d.”

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