We are witnessing a fundamental shift in how oil markets are being priced. Not long ago, the prevailing narrative pointed toward weak demand and the possibility of significantly lower prices. That view has now been abruptly overturned by geopolitical disruption. What makes this moment particularly complex is that markets appear to be treating the current crisis as temporary. Forward curves suggest that while near-term prices are elevated, longer-term expectations remain anchored, with Brent crude projected in the mid-$70s. In other words, traders are isolating this as a short-term shock rather than a structural transformation.
But beneath that surface lies a deeper issue: dislocation. This is not a classic demand collapse like 2020. Instead, we are facing a mismatch between where crude is available and where it is needed. Supply exists, but logistical and geopolitical constraints are preventing it from reaching demand centers efficiently. Pricing anomalies reinforce this point. The unusual inversion of WTI trading above Brent signals that something more structural may be at play, potentially linked to currency dynamics or shifting trade flows. In many ways, this resembles early 2020, when markets had not yet fully grasped the scale of disruption ahead. Today, the risk is not that oil is absent, but that it is increasingly misaligned, geographically, politically, and structurally, with global demand.