RAN, OIL AND THE ART OF THE CONVENIENT CRISIS

19 February 2026

Brent crude pushed above $71.50 yesterday. WTI broke $66. A 4% surge in a single session, with more to follow in early European trading. The headlines wrote themselves: US-Iran tensions, Strait of Hormuz fears, military build-up in the Persian Gulf.

All of that is real. But is geopolitical risk genuinely driving this spike, or is it doing the market a useful favour — providing cover for something more structurally inconvenient?

Here is the problem the oil market does not particularly want to discuss. The IEA’s implied surplus for 2026 has ballooned to nearly 4 million barrels per day – driven by OPEC+ unwinding its production cuts and relentless output growth from the United States, Canada, Brazil, Guyana and Argentina. Global demand growth is forecast at just 930,000 barrels per day – tepid, weighed down by EV adoption, improving vehicle efficiency and anaemic economic conditions. On paper, this is one of the most oversupplied markets in recent memory.

And yet here we are, with Brent at six-month highs. Iranian exports run at roughly 1.5 million barrels per day. Total flows through the Strait of Hormuz reach around 20 million barrels per day. A full-scale disruption would be seismic, potentially erasing the entire surplus at a stroke.
The Iran risk is not imaginary. But what it conveniently masks is that the physical market is already tighter than balance sheets suggest – sanctioned oil finding fewer willing buyers, Indian refiners shunning Russian barrels, and the Brent forward curve sitting in backwardation well into 2028. That is not the shape of a market drowning in surplus.

Geopolitical crises do not create oil market fundamentals. They temporarily obscure them.

When the dust settles – as it eventually does – the surplus will still be there.