Brent crude futures fluctuated near the $90 per barrel mark early Thursday before settling around $87, as market participants assessed ongoing diplomatic efforts surrounding the Strait of Hormuz. According to Jefferies analysis, weakening diesel margins are exposing genuine tightness in global fuel supplies beyond what spot crude prices alone suggest. The energy firm has flagged rising concerns among top industry experts about a potential supply shock developing in the months ahead.
Negotiations between the U.S. and Iran remain stalled, with the Trump administration maintaining its embargo on Iranian ports while Tehran seeks compensation for war-related damages. The geopolitical impasse, combined with regional supply disruptions affecting nations including Pakistan, continues to undergird crude prices and reinforce concerns about fuel availability. Energy analysts stress that diesel crack spreads—the profit margin for refining diesel—are widening, indicating refineries face mounting challenges in meeting global demand.
The convergence of frozen diplomatic talks and tightening physical supplies suggests structural headwinds for energy markets that may persist beyond near-term price volatility. Market participants are closely monitoring whether negotiations progress and how regional disruptions evolve, as both developments carry material implications for refinery economics and global petroleum product availability.