Oil Analyst Declares 'Both Sides Are Lying' on Iran-US Flows
1h ago|4 min readStandard
Fazen Markets Editorial Desk
Collective editorial team · methodology
crude-oiliran-sanctions
Fazen Markets Editorial Desk
Collective editorial team · methodology
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Fereidun Fesharaki, Chairman Emeritus of consultancy FGE NexantECA, stated that "both sides are lying" regarding oil flows in the ongoing US-Iran conflict. He delivered the assessment in a June 11, 2026, interview on Bloomberg's 'Insight With Haslinda Amin'. Fesharaki asserted that current oil price movements are driven primarily by market sentiment rather than changes in physical supply and demand. The comments come as global benchmark Brent crude trades near $84 per barrel, holding a $5-$8 risk premium attributed to Middle East tensions.
Geopolitical risk premia in oil are typically short-lived without a tangible supply disruption. The last significant sustained premium occurred after Russia's invasion of Ukraine in February 2022, which added over $30 to Brent prices within weeks. The current macro backdrop features subdued global demand growth, persistent inflation, and central banks maintaining higher-for-longer interest rate policies. These conditions typically pressure commodity prices, making the current resilience notable.
The immediate catalyst is the escalation of indirect confrontations between the US and Iran. Incidents involving shipping in the Strait of Hormuz and attacks on energy infrastructure have intensified. Markets are reacting to the potential for a miscalculation that could directly impede the transit of crude from the Persian Gulf, which carries 21 million barrels per day. Fesharaki's core argument is that official rhetoric from both nations exaggerates the actual impact on physical barrels, creating a narrative-driven price floor.
Despite heightened rhetoric, physical oil flows show remarkable stability. Global crude inventories stand at 2.85 billion barrels, only 1.2% below the five-year seasonal average. Iran's crude exports have averaged 1.52 million barrels per day over the last quarter, a figure corroborated by tanker-tracking data from firms like Kpler and Vortexa. This export level is down only 8% from pre-sanction peaks, indicating significant leakage in the enforcement regime.
Benchmark prices reflect the sentiment disconnect. Brent crude futures for August 2026 delivery trade at $84.15, while the December 2027 contract is at $78.40. This $5.75 backwardation indicates tight near-term supply fears. The S&P GSCI Commodity Index is up 4.7% year-to-date, outperforming the S&P 500's 2.1% gain. Implied volatility for Brent crude options, a measure of expected price swings, has jumped to 32%, its highest level since October 2025.
| Metric | Current Level | Change vs. 30 Days Ago |
|---|---|---|
| Brent Crude Price | $84.15/bbl | +$3.20 (+4.0%) |
| Iran Export Volume | 1.52 mb/d | +0.10 mb/d |
| Global Inventories | 2.85 bn bbl | -15 mn bbl |
| Brent Volatility (CBOE/OVX) | 32% | +8 percentage points |
The sentiment-driven premium creates distinct winners and losers. Integrated oil majors like ExxonMobil (XOM) and Shell (SHEL) benefit from higher upstream realizations, boosting cash flow for shareholder returns. Pure-play US shale producers like Pioneer Natural Resources (PXD) and EOG Resources (EOG) gain as WTI prices track higher, though their hedging programs may cap near-term upside. Refiners like Valero Energy (VLO) face margin compression as rising crude input costs outpace gains in gasoline and diesel cracks.
A key counter-argument is that global demand remains fragile, particularly from China. Any economic slowdown there could rapidly erase the current premium, leaving prices vulnerable to a sharp correction. Market positioning data from the CFTC shows money managers have increased their net-long positions in WTI futures to 210,000 contracts, a two-month high. This speculative length suggests the market is vulnerable to a rapid unwind if the geopolitical narrative cools, even without a change in physical fundamentals.
Three specific catalysts will test the durability of the current risk premium. The next OPEC+ monitoring committee meeting on July 3 will signal whether the group feels compelled to release more oil. The US Treasury's semi-annual report on foreign exchange policies, due by October 15, will detail sanctions enforcement and could name new Chinese entities facilitating Iranian oil trade. Any confirmation of a direct US-Iran naval skirmish in the Strait of Hormuz would be an immediate price catalyst.
Traders are monitoring key technical levels for Brent crude. Immediate support rests at the 50-day moving average of $81.50. A sustained break above $85.70, the April high, could trigger a move toward the $90 psychological resistance. The 10-year US Treasury yield, currently at 4.25%, remains a barometer for broader risk appetite; a spike above 4.50% could pressure all risk assets, including oil. Investors can track these developments through Fazen Markets' energy analysis hub.
It means price swings are increasingly detached from physical barrel counts, making traditional supply-demand analysis less reliable. Retail investors in energy ETFs like XLE or USO are exposed to higher volatility from headlines. This environment favors traders who can react quickly to news flow over long-term buy-and-hold strategies. Monitoring shipping data and refinery run rates provides a more grounded view than political statements.
The current $5-$8 premium is modest compared to historical shocks. The 1990 Gulf War triggered a 130% price spike. The 2019 attack on Saudi Arabia's Abqaiq facility caused a 15% intraday jump. The premium is more akin to the chronic $3-$5 risk add-ons seen during periods of elevated US-Venezuela tensions in 2018-2019. This suggests the market views a full-scale supply interruption as a low-probability, high-severity tail risk.
Iran's exports peaked at nearly 2.6 million barrels per day in 2017 before the US re-imposed sanctions in 2018. Exports cratered to under 300,000 bpd by mid-2020. The steady climb back to 1.5 million bpd demonstrates the limits of enforcement and the emergence of opaque shipping networks. This volume is sufficient to influence global balances but remains well below the country's estimated 3.8 million bpd production capacity, leaving significant swing potential if sanctions were lifted.
Geopolitical noise, not physical shortage, is currently underpinning oil prices.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. CFD trading carries high risk of capital loss.
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