Francisco Blanch, Bank of America’s global head of commodities and derivatives, has signaled that the acute phase of the energy supply shock is likely ending.
Blanch argues that oil supplies are poised to normalize because both the United States and Iran have a vested interest in stabilizing the market, effectively removing the tail risk that has dominated energy trading since the conflict began nearly four months ago.
The outlook from BofA’s top commodities strategist suggests a structural shift in how markets should price geopolitical risk in the Middle East.
Blanch noted that the global economy and energy flows have demonstrated resilience throughout the crisis, with the United States emerging from the confrontation in a strengthened position regarding energy security.
This perspective challenges the prevailing narrative of prolonged supply disruption that has kept a significant risk premium embedded in crude prices.
Global oil markets have been undergoing a rapid repricing cycle following reports that Washington and Tehran have reached a mutual understanding aimed at de-escalating tensions.