Front-month oil contracts remain well above later-dated barrels, but the wider April-to-May jump is concentrated in June-August 2026, signaling traders expect the Persian Gulf disruption to ease rather than persist.
That backwardation suggests a near-term supply shortage tied to the closed Strait of Hormuz, with the curve implying reopening and normalization over time even though 34% of global crude trade passed through the chokepoint in 2025.
U.S. producers are not positioning for a prolonged shortage: among major exploration and production companies, only Diamondback Energy raised 2026 capital spending, to $3.9 billion from $3.75 billion.
If that market view proves wrong, energy stocks could still benefit from higher-for-longer oil prices as ceasefires have repeatedly failed, the strait remains shut, and damaged regional infrastructure may take years to repair.
Why are US oil producers hesitating to drill more amid a historic supply crisis and record-high prices?
Is the oil market's bet on a quick recovery a catastrophic miscalculation for the global economy?
Can strategic reserves and financial backstops truly shield the world from its largest oil disruption in history?