Oilprice.com said the recent selloff in crude has likely gone too far, and ING Research is pointing to one thing: buyers are still betting on a quick return to normal oil flows through the Persian Gulf. That looks too optimistic while United States and Iran tensions keep shipping risk alive.
Brent crude for August delivery rose 0.74% to $72.54 per barrel at 9.25am ET on Monday, even as the broader move has left prices near $70 per barrel. The gap between the rebound in the benchmark and the deeper selloff shows how quickly war-risk pricing can return when shipping routes look less secure.
Alex Kimani on $70 Brent
"Global oil prices have collapsed back to pre-war levels, trading down near $70 per barrel" — Alex Kimani wrote that line in the Oilprice.com article, and it captures the swing traders are trying to price around. The move back toward pre-war levels came after tit-for-tat strikes over the weekend exposed the fragility of the 60-day ceasefire.
ING said the market has become too optimistic about a fast resumption of normal oil flows through the Persian Gulf. For traders, that means the current price does not fully reflect a shipping corridor that can tighten again if tensions rise.
Buyers and refiners defer
Buyers have kept deferring purchases while refiners draw down on-site stocks instead of buying new crude. That is the physical market signal behind the selloff: less spot buying today, more reliance on inventories already in tank.
Brent has also been trading at a steep discount to future contracts, a structure that usually rewards holding barrels now rather than waiting. Continuous inventory drawdowns are unsustainable, and the longer buyers delay restocking, the more abrupt the next round of purchases can become.
China at 7.8 million
China's crude oil imports have fallen nearly 30% year over year to 7.8 million barrels per day, their lowest levels since 2018. That weakness has helped keep global prices in check, but it also shows demand is not absorbing supply as quickly as some traders expected.
Kpler projected that China's crude oil imports and broader demand could recover as early as August. If that happens while Persian Gulf shipping risk stays elevated, Brent could tighten faster than the current selloff implies, and refiners waiting for a deeper discount may end up buying into a stronger market.
Over the next stretch, the market is watching whether China does recover in August and whether oil flows through the Persian Gulf normalize fast enough to justify the latest price break. Until then, the spread between near-term Brent and future contracts is the clearest read on how much fear remains in the barrel.
