Three signals oil bulls are underpricing as the Hormuz crisis drags on

Three signals oil bulls are underpricing as the Hormuz crisis drags on ICE Brent crude settled near $93 on Friday even as Middle East supply losses head toward a billion barrels; Venezuela's return and reopening hopes explain the disconnect. Oil prices fell on Friday (2026-06-05) as traders grew more confident that renewed US-Iran conflict was less likely, with ICE Brent crude front-month settling at $93.09 and NYMEX WTI crude front-month at $90.54. In the week to Friday (2026-06-05), ICE Brent crude front-month rose 1.1% and NYMEX WTI crude front-month gained 3.6%. Brent is trading near $96 as Asia opens on Monday (2026-06-08), a small bounce that fits a market whipsawed by competing headlines.⁵ That matters because the supply story has only worsened while prices have stalled. The Strait of Hormuz, through which around 20% of the world's oil shipped before the war, has been effectively shut to commercial traffic for almost two months.² Kpler put the cumulative loss of Middle East supply since February 28 at 782 million barrels as of May 8, on track for a billion by the end of that month.³ Citi told clients on Tuesday (2026-05-19) it expected ICE Brent crude front-month near $120 in the near term, arguing the market was underpricing prolonged disruption, and Wood Mackenzie sketched a path toward $200.¹ Yet ICE Brent crude front-month now sits well below the $105.61 it fetched intraday on Wednesday (2026-05-20).¹ The crunch narrative is consensus. The tape is not paying for it. The first thing the bulls are discounting is Venezuela. Kpler reported the country is already producing and exporting 1.25 million barrels a day after the United States toppled the Maduro government and lifted sanctions so American firms could return.⁶ Kpler analyst Naveen Das said output could climb to 1.5 million barrels daily by year-end.⁶ The grade matters as much as the volume. Das noted Venezuela's barrels are extra-heavy, high-sulphur crude, putting them in direct competition with Iranian and Russian supply.⁶ The medium and heavy sour grades that vanished from Hormuz feed Asian refiners, and Venezuelan heavy sour is a partial substitute for exactly those buyers. If it ramps, the inventory math the IEA flagged, with 164 million barrels released by governments and industry as of May 8, loosens at the margin.⁴ The second is that oil is already moving again. Three supertankers crossed the Strait of Hormuz on Wednesday (2026-05-20), carrying 6 million barrels of Middle East crude bound for Asia after waiting in the Gulf for more than two months.¹ Analysts had expected the strait to reopen by the end of May or early June, roughly the window the market is now in.⁴ Politics pulls the same way. President Trump has repeatedly said the war will end very quickly, and each assertion has dented prices; his comments on Wednesday (2026-05-20) knocked about 5% off oil in a session.¹ Investors are trading the ceasefire, not just the blockade. If a reopening is confirmed on the analysts' timetable, the risk premium unwinds faster than the supply gap closes.⁴ The third signal is in how the post-war trade is being rebuilt. The UAE's energy minister, Sultan al-Jaber, has argued that energy security is no longer just about the ability to produce but about routes, access, storage and redundancy.⁶ EnergyReader's own signal data show the freshest front-month reads on Brent are bearish and finance-driven, the kind that tend to lead price before fundamentals catch up. A trade restructured around diversified routes pays a smaller premium for one chokepoint over time. None of this makes the bear case clean. Buffers are genuinely thin. The IEA warned of a record drawdown, PVM said global stocks could reach critically low levels, and the supply loss is still heading toward a billion barrels.^4,3 If Hormuz stays dark and Venezuela underdelivers, $120 is not a stretch and $200 is not absurd.¹ So the verdict rests on three observable things. Watch whether the strait actually reopens on the end-May to early-June window analysts set⁴, whether the three supertankers that crossed on Wednesday (2026-05-20) become a steady flow rather than a one-off¹, and whether Venezuela's 1.25 million barrels a day climbs toward the 1.5 million Kpler expects.⁶ If tankers keep moving and Venezuelan heavy sour lands in Asian refineries, the supercrunch stays a forecast and the bulls keep getting faded. If July arrives with Hormuz still shut and Venezuela short, early June's softness was the trap.⁶