News & Views
In recent years, sanctions targeting individuals, vessels, and companies have increased significantly. This has created an ever increasing need to ensure compliance from our side with the rules in vigour. The Bunker Holding compliance team have prepared an overview of our approach: Doing Business the Right Way.
Global Economy
Inflation rates for several countries are showing initial impacts of increasing energy prices. The UN’s Food and Agricultural Organisation’s Food Price Index is also up in March, but the consequences from the closure are yet to show up. Comparison with earlier periods show a potential doubling of the index.
Shipping Markets
Total global seaborne container volume rose 6.6% year-on-year, but is down over 11% from January. The Global Supply Chain Index rose considerably in March.
Port Insights
Notice periods are shortening, availability down, strong demand in deviation ports.
Oil Prices
Oil prices extremely volatile. Time spreads continue to indicate severe stress across the products.
Port Flows
ARA stocks are well below the lows. Fujairah flows have come to a standstill.
Observations
The US Energy Information Administration has halved its oil demand outlook for 2026, and increased the 2027 outlook considerably. It is assumed that the conflict will last through April and the effects abate by late 2026. A stock draw of 5.1 mb/d in Q2 is projected. Brent is forecast at $115/bbl in Q2, before gradually falling to below $80 by year-end.
News & Views
In recent years, sanctions targeting individuals, vessels, and companies have increased significantly. This has created an ever increasing need to ensure compliance from our side with the rules in vigour. The Bunker Holding compliance team have prepared an overview of our approach: Doing Business the Right Way.
In recent years, sanctions targeting individuals, vessels, and companies have increased significantly. Latest Clarksons data, for instance, show that some 920-930 tankers are now sanctioned, up from 556 in December 2025. This has created an ever increasing need to ensure compliance from our side with the rules in vigour. Recent geopolitical developments, particularly the ongoing conflict in the Middle East, have led to temporary waivers on certain Russian and Iranian oil cargoes already at sea.
Sanctioned oil tankers
As the regulatory landscape becomes more fluid, the volume of documentation also increases, along with the time and attention needed to ensure all steps are completed correctly. This is why our traders may request additional paperwork relating to vessels and cargoes, and why traders may need additional time to respond properly to enquiries. It is done to ensure we are there with the product that can be stemmed without issues pertaining to the sanctions. In the following we have set out our approach to compliance, which we believe is important to highlight in the current, fluid situation.
The Bunker Holding compliance team have prepared an overview of our approach: Doing Business the Right Way.
Doing Business the Right Way: Bunker Holding’s Commitment to Compliance and Responsibility
At Bunker Holding, compliance is not just a regulatory requirement – it is an integral part of how we conduct business. As a global leader in the bunkering industry, we are committed to operating with integrity, transparency, and accountability across all markets.
We believe that a strong compliance framework underpins responsible trade, builds trust, and supports long-term partnerships.
Why This Matters to Our Clients
When working with Bunker Holding, clients benefit from:
Robust Due Diligence Processes
We apply systematic screening and review procedures designed to identify and manage regulatory and commercial risks in our transactions.
Navigating Complex Regulatory Environments
Our compliance framework is designed to operate effectively across evolving global regulations, helping to minimise the risk of avoidable disruptions.
Clarity and Transparency
We provide clear documentation, verification standards, and open communication to support informed and confident decision-making.
Shared Commitment to Ethical Business Practices
Partnering with an organisation that prioritises responsible conduct can complement your own compliance and governance objectives.
Consistent Execution Across Markets
Our global approach promotes a reliable and coordinated way of working across regions and counterparties.
How We Deliver This in Practice
These outcomes are supported by a structured and integrated approach to compliance across our organization – from our culture and governance framework to the policies and controls that guide our daily operations:
A Culture of Compliance
Compliance at Bunker Holding extends beyond formal requirements. It is embedded in our corporate values and reflected in the decisions we make every day.
Clear Policies and Strong Governance
We maintain a comprehensive framework of policies and guidelines aligned with applicable laws, industry standards, and ethical expectations. These cover key areas such as regulatory compliance, environmental responsibility, workplace safety, contractual obligations, and business conduct. Together, they provide a foundation for disciplined and consistent operations worldwide.
Code of Conduct: Integrity in Action
Our Code of Conduct defines how we engage with colleagues, clients, and stakeholders. It reinforces our expectations in areas including supply chain due diligence and KYC, anti-bribery and corruption prevention, and trade sanctions compliance. We expect both employees and business partners to uphold these principles, supporting a culture of accountability and professionalism.
Trade Sanctions: A Structured Approach
Trade sanctions compliance remains a key focus in today’s dynamic global landscape. Bunker Holding operates a multi-layered system incorporating real-time data, internal controls, advanced screening tools, cross-functional coordination, ongoing training, and external legal input. This framework is designed to enable informed decision-making and adherence to applicable regulatory requirements.
A Trusted and Responsible Counterparty
In a complex and evolving regulatory landscape, consistency, transparency, and integrity matter more than ever. At Bunker Holding, we are committed to maintaining a structured and responsible approach to compliance across all our operations.
By working with partners who share these values, we aim to support efficient, transparent, and responsible trade worldwide.
Still, each counterpart remains responsible
While Bunker Holding maintains robust compliance processes, each counterparty remains responsible for its own legal and regulatory obligations.
Port Insights
Oil Prices
Oil prices extremely volatile. Time spreads continue to indicate severe stress across the products.
Oil prices
The so-called scrubber spread, or HI-5, represented here by the reported delivered prices of 0.5% and 3.5%, decreased in Singapore, Rotterdam and in Houston. In Singapore, the 0.5% was up $5 between April 1st and April 7th, while the 3.5% was up $34. The spread is down $29/mt at $133/mt. The current spread remains elevated. In Rotterdam, the 0.5% fell by $20, and the 3.5% fell by $5. The spread is down $15 to $35/mt. The 0.5% was up $40 in Houston, while the 3.5% rose $62. The spread was down $22 at $225/mt.
Oil prices Brent, Gasoil and HSFO
Estimated LNG Bunker Price, NW Europe
Biodiesel and ICE Gasoil prices
Carbon price, EUA
VLSFO-HSFO (Hi-5) S’pore, R’dam, Houston, weekly average
Rotterdam Hi-5 spread (barges, $/mt, weekly average)
The Brent moves remain extreme. On Wednesday, crude dropped to $101, followed by a continued rebound to over $109 on Thursday. After the Easter break, the price moved above $110 during Tuesday. Intra-day the price had been higher. This is the front-month price movement of Brent on the ICE. Dated Brent reached nearly $127 last week, and was close to $130 on Tuesday. The Brent crude oil curve’s backwardated slope increased to around $23/bbl at the 3-month horizon, and continues in backwardation all the way through 2033.
Gasoil and fuel curves
The ICE Gasoil price moved somewhat out of sync with the Brent front-month price over the last week, as shown by the ratio between the 2 prices. In a repeat of the prior week, ICE Gasoil’s six-month time spiked during last week, and rose further on Monday, and continued Tuesday, to over $568. By the end of Tuesday, the front-month price had moved to around $1,552. During the day, the price reached $1,572 before dropping to $1,513. The front-month spread spiked once more on Thursday, reaching $165. On Tuesday, the 7th, the spread had fallen to around $161. The contract remains backwardated and very volatile. The ULSD premium in northwest Europe dropped considerably, trading at almost $2 under the ICE gasoil front month on Thursday. The differential remained at that level through Tuesday. Volatility has become considerable.
LGO Curves last three weeks
LGO Time spreads last three weeks
LGO front month time spread last two months
The Rotterdam 3.5% barges fuel oil curve’s structure followed more or less the Gasoil pattern. The 6-month spread jumped to $126 by the 2nd (month 1 minus month 6) backwardation, but moved back down to $116 on Tuesday. The front-to-second-month spread again reached over $32 last week, but fell back to around $30 by Tuesday.
Rotterdam 3.5% FO Curves last three weeks
Rotterdam 3.5% FO Time spreads last three weeks
Rotterdam 3.5% FO front month time spread last two months
Global Economy
Inflation rates for several countries are showing initial impacts of increasing energy prices. The UN’s Food and Agricultural Organisation’s Food Price Index is also up in March, but the consequences from the closure are yet to show up. Comparison with earlier periods show a potential doubling of the index.
This week’s calendar
The economic data releases include March inflation rates for a number of countries. As it takes time for the price effects of the disturbances from the war in the Middle East to filter through, the initial inflation rates will be relatively subdued. Nevertheless, US inflation is up by 0.7% points to 3.1%, India’s is increasing to 3.4% and Mexico’s to 4.6%. China’s inflation rate, however, is down to 1.1%. The country’s measures to protect its economy may be working, while at the same time, the economy has significant overcapacity that is driving down prices.
The Chinese trade balance in March is more or less unchanged from the earlier months. The reason for phrasing it like this, is that the data for January and February was combined at $213 bn, while the March number is around $105 bln. The German trade balance is down by around 10%.
First quarter GDP growth data for Singapore suggests a considerable slowdown. US Q4 GDP growth is finalised at 0.7% (that is an annualised figure, so that quarter on quarter growth would be slightly above 0.15%). That is half the rate that the Bureau of Economic Analysis published in its advance estimate late February.
| Date | Place | Topic | Expect | Change |
| 09/04 | Germany | Trade balance (Feb.) | €19.1b | -€2.1b |
| USA | GDP growth Q4 final (qoq) | 0.7% | -3.7% | |
| Germany | Industrial prod. Feb. (mom) | 0.2% | +0.7% | |
| Mexico | Inflation rate March (yoy) | 4.6% | +0.6% | |
| 10/04 | China | Inflation rate March (yoy) | 1.1% | -0.2% |
| USA | Inflation rate March (yoy) | 3.1% | +0.7% | |
| Turkey | Industrial prod. Feb. (yoy) | -0.8% | +1% | |
| 14/04 | China | Trade balance (Mar.) | $105b | +/- Unch. |
| Singapore | GDP growth Q1 (qoq) | 0.1% | -2% | |
| 15/04 | Euro area | Industrial prod. Feb. (mom) | 0.8% | +2.3% |
| India | Inflation rate March (yoy) | 3.4% | +0.2% |
World food commodity prices rose in March, potential to rise much further
The UN’s Food and Agricultural Organization (FAO) reported that the world food commodity prices rose in March, due mainly to higher energy prices. The FAO Food Price Index, which tracks monthly changes in the international prices of a basket of globally-traded food commodities, averaged 128.5 points in March, or 2.4% from February. The sub-indices show the interaction of the economy. The Cereal Price Index is up by 1.5%, due to higher oil prices, but “cushioned” by ample global cereal supplies according to the FAO. The Vegetable Oil Index rose 5.1%, with palm, soy, sunflower and rapeseed oil all rising, “reflecting spillover effects from the sharp increases in crude oil prices, which catalysed expectations of stronger demand for biofuels.” Likewise, the Sugar Price Index increased by 7.2%. “Rising expectations that Brazil, the main sugar exporter, would use more sugarcane to produce ethanol to counter higher international crude oil prices overweighed a generally favourable global supply outlook for the current season, supported by good harvest progress in India and Thailand.”
The FAO also published a report on the impacts of the closure of the Strait of Hormuz on global agrifood. We addressed the chain effects last week in the context of the systemic delays from the energy supply chain. The FAO highlights the further impacts of blocked energy and fertilizer supply. According to its analysis, it takes 7+ days after the initial blocking to see cost of living for households increase, 30+ days to see disruptions in humanitarian shipments and after 60 days, implications for future crops start to appear. These impacts themselves are layered. The input cost surge of oil and gas, lead to higher farm operating expenses. The fertilizer supply shock is a physical one, as the Gulf region accounts for 20-30% of global fertilizer exports. The lower fertilizer availability impacts gas-intensive nitrogen production, which results in higher fertilizer prices, that then lead to lower application rates of fertilizer to crops. Between 60-360 days, the reduced fertilizer use results in yield contraction, or lower crop output per area. The FAO says that there will also be changes in the cropping pattern; the result is tighter global grain supply, which lead to food inflation from around 180 days onward. This second round of food price inflation is akin to the energy price inflation, in that it is a reduction in supply that drives up prices. That then leads to the changes in purchasing behaviour by the consumer, and erosion of the consumer budget. The economies around the globe will slow down materially.
The issue cannot be resolved easily. As the FAO highlights: “Gulf countries are among the top exporters of nitrogen fertilizers like urea and ammonia and phosphate fertilizers. The loss of Gulf exports creates an immediate global shortfall with no quick substitute, since no strategic fertilizer stockpiles exist internationally and alternative production in other regions was already limited by high energy costs and earlier export restrictions”.
And it is not just the fertilizer export from the Gulf. It is also sulphur. “Gulf countries represent directly about 25% of sulphur production and about 50% of global sulphur exports. Heavy crude oil exported by the Gulf is sulphur rich [3-3.5% contents] and generate sulphur when refined in third countries. This sulphur is a key component to process raw phosphate rock into plant-available fertilizer. Increase cost of sulfuric acid and shortage will impact the full fertilizer value chain, including in other producing countries like Morocco.”
What is more, the Gulf countries are also substantial food importers. Excluding Iraq and Iran, the FAO estimates that the Gulf countries depend for 55-80% on food imports. Most of those imports are transported by ship. The countries have strategic supplies, but those will need to be replenished at some point.
The FAO also modelled three scenarios of impacts and consequences. A first scenario where the oil price rises to $120 for 3 months from March onwards. The impact is limited to producers in the southern hemisphere which have not yet purchased their inputs. A second scenario, with prices rising to $140 in April/May and stay at $120 through end-2026. Production and planting decisions are impacted globally. A third scenario, which is a long-term shift, due to a sustained blockade, impacting food production growth rates globally through 2030. The FAO underlines that the scenarios exclude destruction of production facilities, desalination plants and water supply, and no impacts on population. Given the reported damage so far, it would seem that these assumptions may need to be revisited.
Seaborne trade flows will be impacted, once more as countries will source from other regions. Likewise, sanctions that are currently in place may be reviewed if economic pressure rises too high.
Three energy price surges and the FAO food price index
Shipping Markets
Total global seaborne container volume rose 6.6% year-on-year, but is down over 11% from January. The Global Supply Chain Index rose considerably in March.
Trade and port calls
Clarksons’ container throughput data for February show a 10% monthly decrease in throughput at Chinese ports to almost 38 mln TEU. That level is up 9.8% year over year. January data was revised up to 30.9 mln TEU, the second-highest ever. The February drop follows the usual patterns. Other major Asian ports are up 7.6% annually, after having increased 8.4% in January. Major US ports experienced a throughput increase of approximately 0.7% compared to the same period last year. The February increase in the US is actually contrary to expectations, given the frontrunning still underway in February 2025. Total global seaborne container volume rose 6.6% year-on-year, but is down over 11% from January.
The Global Supply Chain Pressure Index (GSCPI) rose to 0.68 in March, up from 0.54 in February (revised up). The level indicates rising pressure in the supply chain, as measured by data from the transportation and manufacturing sectors. The supply chain has been slowly tightening by this measure. Counterintuitively, the rising idle vessel counts may be a reflection of the same tightening, due to the blockage in the Strait of Hormuz. With the current gridlock in the Middle East continuing, the indicator will likely rise further in April. The current index level is still very moderate compared to other periods of strong disruptions.
Annual change major ports container throughput
Global Supply Chain Pressure Index 1998-2026
Global port calls continue along the upper end of the five-year range. Last week’s port calls (week 14) were unchanged from the previous week, and from the same week in 2025. Total calls are above 11,900. Deep-sea cargo vessel calls were down 1% from last week. Compared to last year, calls are unchanged, and continue below the multi-year maximum. Chinese deep-sea cargo calls are 1% higher compared to the same period last year, but down 4% from last week. Current levels are just above the 5-year maximum.
Global Port Calls – Total, 7 day average
Global Port Calls – Deep Sea Cargo Vessels, 7 day average
Port congestion
The latest port congestion data, as of 5 April (the most recent available data), indicates a 1.4% increase from the previous report. The fleet’s share in deadweight tonnage (dwt) capacity in port was almost 29%, reflecting a rise of 0.5% point from the previous week. Chinese port congestion for deep-sea vessels rose by 1.5% over the same period, reaching above 122 mln dwt, exceeding the previous period highs. LNG congestion in Northwest Europe decreased by more than 25% last week, with volumes falling just below 3 mln cbm by the week’s end. Current levels are at the period average. At the same time, European gas storage is currently at 28.6% full, around 6.5% below the level seen at this point in 2025, and up around 0.5% point from last week. However, projections indicate that storage in Northwest Europe will follow a similar trajectory to that experienced in 2021. That is a strong downward revision compared to earlier forecasts, where a trend comparable to 2022 was envisaged.
Port Congestion Index – Deep Sea Cargo Vessels In Port, m dwt, 7dma
Port Congestion Index – LNG Vessels In North Sea Ports, mln m3, 7dma
Earnings
Clarksons’ general earnings index, expressed in USD/day, fell more than 1% to below $48,700 for the week ending April 3rd. The index is a composite of all the leading shipping segments. The level is 75% above the 5-year average. Without the container sector earnings, the index is just below $47,400, down $660, or 1.4% from the previous week. The current level is still among the highest since 2008. The Clean and Dry Baltic indices increased, while the Dirty Index decreased. The main container index rose.
Clarksea earnings index
Clarksea index last 6 years
The Baltic Dry Index (BDI) rose by nearly 2% during the week ending on the 3rd, reaching 2,066 points. The index is currently 13% above the 5-year average. The current move is out of sync with the typical seasonal profile. The Dirty Product/Crude Oil Tanker Index decreased by nearly 3%. The current level of 3,639 is 230% above the period average and significantly exceeds the maximum. The clean tanker index saw a more than 1% increase over the course of the week. The clean index level of 1,969 is 134% above the seasonal average. It is evident that the index is no longer applicable in relation to the seasonal pattern in the current circumstances. Container freight levels, as measured by Freightos, rose by 3.2% last week to $1,816. The current level is 54% below the five-year average, yet above the lows recorded for the same period. The China-to-US West Coast index rose by almost 11%, while the China-to-Northwest Europe index was up 2%.
Baltic Dry Index
Freightos container index
Idle fleet and floating storage
Currently 4.5% of the deepsea fleet is idle, up 0.5% from last week. This is close to the 5-year trading band high (covering 2021-25). Some 700 vessels were idle, accounting for around 79 mln dwt. Last week it was 630 vessels, with almost 71 mln dwt idled. Idle tanker capacity is 5.3%, comprising 240 vessels, up 19 from last week. Idle bulker capacity is 4.6%, up 0.7% points from last week. The 289 vessels reported are up 35 from last week. The idle dry bulk fleet is 7% below average in deadweight capacity (i.e. higher utilisation levels), and close to the average. Tankers are 28% above the 5-year average.
Deep sea vessels idle capacity % Fleet
Tankers idle capacity % Fleet
Tanker floating storage increased by 2 vessels to 111 last week, compared to the prior week. The latest figures show a decrease in crude oil storage of 3 vessels to 47 vessels, with a total capacity of 75 mln barrels. This represents a drop of 4 mln barrels compared to last week. In the product segment, 62 vessels are currently employed for storage, representing an increase of 5 compared to last week, with a storage capacity of approximately 26 mln barrels. Levels are well below the 5-year average of around 121 mln barrels. The extreme backwardation and temporary waivers, will likely result in declining storage.
Vessel speeds
Weekly data indicate that the speed of large container vessels increased 0.2 knots to 15.2 knots. The average speed of medium-sized container ships was down by 0.2 knots at 14.4 knots. Bulkers (Panamax) lowered speed by 0.1 knots to 11 knots. VLCC speeds decreased by 0.3 knots, reaching 12.3 knots. LNG tankers reportedly maintained speeds at 15.2 knots. Initial data shows container vessel speeds down 0.1 knots, while VLCC’s maintained speeds. The actual data for the VLCC speed for last week is a 0.4 knot revision from the initial reading of 12.7 knots, which would have been the highest level in a long period.
VLCC vessel speed
Container vessel speed
Bunker sales
Spanish bunker sales in February were down 38 kt from January at 700 kt, but up 10% year-over-year. Algeciras lost its premier position. The port recorded 197 kt in sales, down 33 kt from January and 20% below the year-ago level. Contrary to the development in Algeciras, Las Palmas registered an annual increase of 10% and a 24 kt (12%) rise from January. Total sales reached 225 kt. Monthly volumes show considerable variation. Santa Cruz de Tenerife fell 24% from the previous month to 69 kt. But those sales are 45% higher than February 2025. The Canary Islands are now the single biggest bunker area of Spain. Barcelona saw sales drop more than 13% annually, but increase 3% monthly to 89 kt.
Gibraltar port only reports the number of bunker calls, rather than volumes sold. Those calls fell marginally from January levels, to 357, up 8 calls from February 2025. The seasonal pattern for the first 2 months is within normal observations.
Spanish bunker deliveries, MoM and YoY change
Gibraltar bunker calls by month
Port Flows
ARA stocks are well below the lows. Fujairah flows have come to a standstill.
Stock levels
This week, Singapore’s middle distillate stock levels increased by 9% or 0.8 mb compared to last week. At 9.9 mb, the level is approximately 1% above the 5-year average (which spans the period from 2021 to 2025). Residual fuel stocks decreased by 4%, or 1 mb, to 23.5 mb. Fuel oil stocks continue to exceed the 5-year maximum levels. Fujairah middle distillate stock levels have increased marginally, and continue to stand below 1.9 mb. Stocks of heavy distillates fell marginally. The level remained just above 5.3 mb. Current heavy distillate stock levels are significantly below the 5-year low recorded previously. However, in the current environment, the actual levels are more indicative of the disruption and the time it may take to rebuild inventories once the situation returns to normal. In Rotterdam, gasoil stocks increased by 0.5% over the past week, rising to above 2.15 mln tonnes. The level remains close to the average recorded over the previous five years. Fuel oil stocks saw a 0.8% decrease, standing at just above 0.8 mln tonnes. The level is 8% below the low point of the period in the current week.
In week 13, US fuel oil stocks fell more than 3%, falling around 1 mb to 24.4 mb. East Coast stocks rose by more than 8%, to 5.7 mb, while Gulf Coast stocks decreased by nearly 10%, to 13.8 mb. Overall, East Coast stocks are above average, while Gulf Coast stocks are well below average.
Rotterdam Gasoil Stocks (KT)
Rotterdam Fuel Oil Stocks (KT)
Singapore Middle Distillate Stocks
Singapore Residual Fuel Stocks
Fujairah Medium Distillate Stocks
Fujairah Heavy Distillate Stocks
Gasoil flows
Approximately 40 kt of gasoil were imported into ARA in week 14, representing a decrease of 120 kt from the previous week. Last week’s levels have been revised down by 30 kt to 150 kt. The latest inflows are the lowest on record for the past 5 years. In Singapore, 160 kt imports were reported, down 120 kt from the prior week. The current level is lower than the period low. Fujairah saw no imports, as was the case last week. In light of ongoing developments in the Persian Gulf region, the import of goods is expected to remain at low levels, if not completely absent. Gibraltar recorded 110 kt imports during the week, compared to none the previous week
ARA: Gasoil
Singapore: Gasoil
The net balance was a 160 kt inflow to Singapore, with no exports recorded. Last week’s inflow was increased to 275 kt. ARA experienced a 50 kt net outflow, with a gross outflow of approximately 80 kt. Last week’s outflow was revised to a 250 kt outflow. Fujairah recorded no outflows. Gibraltar saw 60 kt outflows, resulting in a net 45 kt inflow.
Net balance Gasoil
Fuel oil flows
In terms of fuel oil, ARA’s gross inbound flow was 240 kt, which is a decrease of 80 kt from the previous week. That level itself was revised up by 100 kt. The latest level is close to the average recorded over the past five years for this time of year. In Fujairah, inflows were absent last week, just as they were the week before. In Singapore, inflows totalled around 360 kt, which marginally below the level recorded the previous week. Inflows are close to the average of the 5-year pattern. In the Gibraltar area, inflows of 100 kt were reported, which is an 80 kt increase from last week. All weekly import data remains highly volatile.
ARA: Fuel oil imports
Gibraltar area: Fuel oil imports
Fujairah: Fuel oil imports
Singapore area: Fuel oil imports
A net inflow of 90 kt was recorded in ARA, with 150 kt in outflows. Last week’s marginal outflow was revised up to a nearly 90 kt net inflow. The balance in Fujairah showed 140 kt outflows. In Gibraltar, marginal levels of outflows were reported. Net outward flows were 95 kt. Net inflows to Singapore amounted to 190 kt, as gross outflows amounted to 170 kt. These numbers will be revised next week on updated shipping data.
Net balance, Fuel Oil
Observations
The US Energy Information Administration has halved its oil demand outlook for 2026, and increased the 2027 outlook considerably. It is assumed that the conflict will last through April and the effects abate by late 2026. A stock draw of 5.1 mb/d in Q2 is projected. Brent is forecast at $115/bbl in Q2, before gradually falling to below $80 by year-end.
The US Energy Information Administration published its April Short-term Energy Outlook. The agency has significantly revised its price forecast, following the disruptions to oil supply, which it sees persisting through late 2026. The base assumption is that the “conflict does not persist past April and that traffic through the Strait of Hormuz gradually resumes but does not return to pre-conflict levels until late 2026. Shut-in oil production gradually returns as flows through the strait resume and oil trade flows adjust. Given this relatively long adjustment period after flows through the strait resume, we expect oil prices will remain elevated (…)”
The disrupted crude oil production volumes in the Middle East are estimated at 7.5 mb/d across the Persian Gulf countries. In Kuwait, close to 50% is shut in, in the UAE around 30%, in Iraq 65%, in Qatar just over 50%, in Bahrain 67% and in Saudi Arabia, 18%. The EIA assumes that further shut ins follow in April, taking total offline volume to 9.1 mb/d (and this excludes Iran), before gradually decreasing. By Q4 this year, the agency assumes that almost all capacity will be back online.
The disruptions imply a global stock draw of 5.1 mb/d in Q2, including the releases from the Strategic Petroleum Reserve and the strategic stocks of the IEA countries.
Demand growth has been revised to 0.6 mb/d in 2026, or half of what was projected in March. A rebound is then set to follow in 2027 to 1.6 mb/d growth, recapturing much of the lost volume in 2026.
The average Brent price is projected at almost $115/bbl during Q2, before falling to almost $100 in Q3 and then gradually falling to nearly $70 by Q4 2027.
Stock change (mb/d)
World liquids production, April 2026 Outlook
There is a very substantial number of assumptions, many of which can turn out very differently. Further destruction of facilities is possible, especially if the ceasefire does not hold, and clearly, damage assessment will also take time.
The forecast appears optimistic in our view, in particular in terms of the quantities of oil coming back to the market. The price of oil will be driven up, but there is also a natural cap, not so much from fuel switching, but from demand destruction. Such reductions in demand can come about from unaffordability, as well as from government measures trying to conserve fuel. This may become more expedient as time passes and the logistics start to filter through in the storage levels. And such caps will also lower economic activity, reducing demand further.
The outlook also discusses LNG, among other energy sources. The closure of the Strait of Hormuz has taken out a substantial amount of LNG trade. The EIA notes that US LNG export capacity are running at near-peak capacity. The agency sees only very limited flexibility to increase US exports. Any such possibility has to come from deferred maintenance, the pace of new project ramp-ups, as well as recent export authorization agreements.