Oil Falls as Traders Weigh Middle East Return, Supply Glut Risks
Speakers
Michelle Brouhard
— Head of Policy and Geopolitical Risk at Kpler
Summary
Michelle Brouhard discusses oil’s decline below $70/bbl and the outlook for gasoline and crude prices. She sees gasoline staying elevated due to tight product markets and refining constraints, and warns that new Strait of Hormuz tolls could lift oil prices. Broader chokepoint tolling risk is highlighted as a structural geopolitical cost.
- Oil prices fall below $70/bbl (Brent near $73) on Middle East return hopes and supply glut risks
- Gasoline cracks near 2022 highs; US gasoline to stay above $3/gallon through November
- Low product inventories and Middle East refinery outages keep gasoline elevated
- Strait of Hormuz toll proposal could raise shipping costs and crude prices; risk of spreading to Gibraltar, Malacca
- Poorer countries already faced physical fuel shortages while rich countries maintained supply
- Saudi/UAE pipeline plans aim to bypass Hormuz but investment not yet tradeable
Ideas
Gasoline prices to stay elevated
Gasoline prices will remain elevated because product inventories are low, gasoline cracks are at multi-year highs comparable to 2022, Middle East refining capacity is disrupted and not exporting, demand remains strong, and a recent refinery upset in Pennsylvania further tightens the Northeast market. Export restrictions to lower prices are unlikely.
Strait tolls to lift oil prices
A new fee structure for passing through the Strait of Hormuz is very hard to reverse and will raise shipping costs and oil prices. This tolling concept could spread to other global straits like Gibraltar and Malacca, creating a lasting geopolitical risk premium for crude.
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This Bloomberg Markets video, published June 30, 2026, features Michelle Brouhard discussing UGA, WTI. 2 trade ideas extracted by AI with direction and confidence scoring.
Speakers: Michelle Brouhard · Tickers: UGA, WTI