The Economist: Oil markets are still in La La land
Prices have risen sharply. Unfortunately, they still have further to go.
The oil-futures market, in which speculators bet on where the oil price is going, says prices will fall every month for the rest of the year, ending 2026 at about $88.
That implies most of this shock will soon be reversed. If so, traders must believe three things are true:
that America and Iran will soon strike a peace deal;
that their agreement will reopen Hormuz;
and that, soon after the strait is clear, petrol and jet fuel will once again be plentiful.
Markets have a poor record of pricing geopolitical risk. And with oil, they struggle to assess the complexities of the physical trade.
Europe’s governments will also have to change gear. So far they have focused on supporting consumer demand.
They may have to deal with demand destruction
—and, given the possibility of shortages of diesel and jet fuel, plan to protect food-delivery and vital services.
The Economist 30 april 2026
30 april
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