With all eyes on the extent and focus of Israel’s retaliation against Iran, the risk premium is going to dominate near-term proceedings in the oil market; depending on how things pan out, prices could conceivably jump by another $20+pb over the coming weeks. But while geopolitical risks are firmly in the spotlight at present, one should not forget the fundamental oil market drivers waiting in the wings, which are not supportive of a persistently higher oil price. In fact, the risks to our already below-consensus forecast for Brent crude to end 2025 at $70pb are arguably on the downside.
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