The argument is that the back end of the oil futures curve is underpricing the real severity of the current disruption. Around 15 million barrels per day, roughly 15% of global demand, are effectively bottled up by the Strait of Hormuz disruption, and Goldman Sachs estimates about 500 million barrels have already been bridged by stock draws, with that potentially reaching 1 billion barrels by June.
Why we say the market is “lying”:
Longer-dated oil prices have not risen nearly as much as front-month prices. Bloomberg’s piece notes 2027 Brent is up about 17%, versus roughly 43% for front-month contracts, which makes the longer-term curve look too relaxed relative to the size of the physical supply shock.
That matters because producers often look more at the later part of the curve when deciding whether to drill more. Diamondback CEO Kaes Van’t Hof said the “back end of the curve is lying to us,” meaning futures are signaling less urgency than the physical oil system is actually facing. Semafor’s reporting says executives worry this weak future pricing both misreads the disruption risk and discourages enough new supply response.
The broader point is that even if Hormuz reopens, the market still has to refill a very large inventory hole. Bloomberg compares the recent draw to an unusually severe inventory shock, with the article suggesting that by June the global stock decline could be far beyond prior observed declines.
POV:
This is basically saying spot oil is reacting to war risk, but futures are still behaving as if normality comes back quickly. If the disruption lasts longer, or the refill process is slower than the curve implies, then oil could stay higher for longer than many traders currently expect. That would be more supportive for WTI/Brent upside, more inflationary for the global economy, and indirectly relevant for CAD, inflation-sensitive FX, and gold. The “lying” part is really “the curve may be too complacent.”
In fact, we believe the oil prices would be pretty quiet this week. :finger-cross:
source: https://www.bloomberg.com/opinion/articles/2026-04-24/the-oil-futures-market-is-lying-to-us