Oil market enters backwardation as Iran tensions persist. The phenomenon, where near-term futures trade at premium prices over longer-dated contracts, signals traders expect current price spikes to be temporary. Brent crude remains near $99 per barrel, up 36% since late February, while West Texas Intermediate hovers around $87.76, up roughly 30%. However, the futures curve tells a different story. Lower prices for future deliveries suggest markets anticipate resolution to the U.S.-Iran conflict, indicating the current oil price surge is viewed as transitory rather than structural. Analysts debate whether this assessment adequately prices geopolitical risks. The Strait of Hormuz remains congested, and mixed signals from Washington and Tehran on peace negotiations persist.
