Investing in an energy-driven world

THE most consequential variable for global markets in 2026 is no longer the path of US interest rates or even the durability of the artificial intelligence capex cycle. It is the price of a barrel of oil and by extension, the integrity of a single shipping lane in the Persian Gulf.

Since military action began in late February, the Strait of Hormuz, through which roughly a fifth of global oil supply transits, has oscillated between opening and closure. Brent crude averaged US$103 per barrel in March and briefly touched almost US$128 in early April.

Amid this volatility, futures markets and physical markets are telling investors two different stories. Futures are pricing the rising probability of a durable resolution. Physical prices reflect the reality that insurance dynamics, tanker reroutings and shut-in production will not normalise the moment a diplomatic communique is signed.