Daan Struyven

The speaker states their base case for Q4 oil prices is about $20 higher than pre-war levels due to inventory hits, SPR restocking, and a lasting security premium. They also state risks to their forecast are skewed to higher prices. The ongoing supply shock from the Iran war, even with partial rerouting, has structurally reduced available supply and drawn down inventories. Replenishing these inventories and pricing in a persistent geopolitical risk premium creates sustained upward price pressure. The explicit forecast is for meaningfully higher prices than the pre-war equilibrium, with acknowledged upside risk. A faster-than-expected normalization of flows through the Strait of Hormuz and a resolution of the conflict that removes the security premium.

"We look for a decline in Brent from around 70 to 60... We still look for a global surplus... Energy equities are increasing the price on the long-term robust oil." There is a divergence. The commodity (Oil) is bearish due to structural oversupply (1.8m bpd growth vs 1.2m demand). However, Energy Equities are undervalued, efficient, and paying dividends, allowing them to outperform the underlying commodity. SHORT CRUDE OIL / LONG ENERGY EQUITIES A major geopolitical escalation (e.g., Iran closing the Strait of Hormuz) which could spike oil to $200.

Refined product markets are structurally tighter than crude markets. This tightness, combined with seasonal summer demand and a lagged pass-through, explains why retail gasoline prices are not falling as fast as crude. The relative tightness supports refined product prices versus crude.