Oil Futures Markets Still Too Complacent About Supply Shock

The oil futures market appears not to have caught up with the massive supply disruption from the Middle East yet—a supply shock that is now in its third month and lasting more than anyone expected in early March. Brent and WTI crude futures this week are trading more than $30 per barrel higher compared to the levels on February 27, the day before the U.S. and Israel bombed Iran and prompted the Islamic Republic to close the Strait of Hormuz. But the futures trade $20-$30 per barrel lower than the physical cargoes of some grades produced outside…