Rabobank’s Senior Macro Strategist Teeuwe Mevissen highlights that Oil and broader energy markets remain central to the global macro backdrop, tightly linked to Middle East tensions. Disruptions in the Strait of Hormuz have driven price spikes and inventory drawdowns, while US–Iran talks could gradually normalize flows. Mevissen warns the energy shock is feeding inflation, weighing on demand, and represents a classic adverse supply shock.

Middle East tensions keep Oil elevated

“The global macro backdrop continues to be dominated by developments in energy markets, which remain tightly linked to geopolitical tensions in the Middle East. The disruption to shipping routes in the Strait of Hormuz earlier this year triggered a sharp spike in oil prices and significant supply dislocations, with global inventories declining at an accelerated pace. Although recent negotiations between the US and Iran have raised hopes of a partial normalization in energy flows, the adjustment process is expected to be gradual.”

“Even under a favourable scenario, it could take months for oil production and shipping to return to pre-conflict levels.”

“This matters because the energy shock is transmitting broadly across the economy. Higher fuel costs are feeding into transportation, food, and industrial prices, raising headline inflation and increasing the risk of second-round effects. At the same time still elevated prices are starting to weigh on demand, with global oil consumption now projected to decline in 2026.”

“In essence, the global economy is facing a classic adverse supply shock—one that pushes inflation higher while dampening real growth.”

“Any sustained easing of supply constraints could alleviate inflation pressures, while renewed disruptions would exacerbate them.”

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