Oil Market Outlook Post Hormuz Deal (with Guy, Anna, Tom)

Emily Ashworth from Standard Chartered Bank analyzes the oil market after the US-Iran deal. She says the market has unwound some risk premium but not priced in a full return to the status quo. She expects a residual risk premium for Gulf barrels. She provides a detailed timeline for supply recovery: 30-40% in weeks, up to 80% within a year, with 10-20% requiring multi-year remediation. Key uncertainties are OPEC+ reaction and demand recovery, including US strategic reserve refilling.

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Standard Chartered 7.5
Investment Bank $864.00B
Emily Ashworth 8.5

Oil Market Outlook Post Hormuz Deal (with Guy, Anna, Tom)

dxy

No direct mention of the dollar. The focus is on oil supply and demand.

metals

No direct mention of metals. The focus is on oil and LNG.

ndx

No direct mention of tech or NDX. The focus is purely on the oil market.

rut

No direct mention of the Russell 2000. The focus is on the oil market.

wti

We've seen an unwinding of some of the risk premium... The proposed MOU reduces the tail risk of the worst-case disruption scenario.

2 calls

+38

reliable positive edge across multiple calls

5/11/2026 2:37:40 PM	short term up	6 days later	+6.34%	+6.34%
5/11/2026 9:05:56 AM	medium term down	20 days later	-9.81%	+9.81%

yields

No direct mention of yields. The focus is on oil. The easing of oil supply fears could reduce inflationary pressure, which might be slightly negative for yields, but this is not discussed.

How easy is it to value oil right now, given we don't know the details of the MOU and how quickly the strait will reopen?

Guy
Emily Ashworth

We've seen an unwinding of some of the risk premium, but not a pricing in of a complete return to the status quo. It could be viewed as a shift from pricing in war to pricing in peace. The proposed MOU reduces the tail risk of the worst-case disruption scenario, but many details remain unresolved.

The implementation risk is substantial. The next few weeks will be about whether diplomacy delivers the physical recovery that markets have already begun to anticipate.
Before the war, there was very little risk premium built in. What do you think that will be over the medium term?

Guy
Emily Ashworth

I'm not sure we will see a return to pre-conflict pricing. There will now always be an inherent risk premium attributed to Gulf barrels. Iran has shown how effectively it can use the Strait of Hormuz to control markets. We will see a diversification away from that concentration.

Safety will need to be assured. Mines may need to be cleared. Insurance premiums will need to fall back to normal levels.
How much confidence do you have around assumptions about how quickly supply comes back?

Anna
Emily Ashworth

There are a lot of assumptions. I categorize supply into three tranches: 1) Supply off-stream due to logistics (30-40% available in weeks), 2) Shut-in wells with limited damage (up to 80% within a year), 3) Permanent reservoir or infrastructure loss (10-20% requiring multi-year remediation, up to 10% permanent loss).

The path to normalization for LNG is going to be faster than crude. Qatar Energy's announcement today is quite impressive.
Do you align with the view that with the UAE out of OPEC, there is a scenario towards the end of this year where we get a supply glut?

Anna
Emily Ashworth

I don't think we'll see a supply glut. Key uncertainties are how Saudi Arabia and the UAE will react. Will OPEC remain committed to its gradual unwinding of output cuts? Or will the UAE look to capitalize on its exit from OPEC to increase market share? On the demand side, the key is how quickly demand returns and when the US starts to refill strategic reserves.
Do you have insights into what's happening in China, the demand story there?

Anna
Emily Ashworth

It's not surprising to see China capitalizing on its strategic reserve to reduce imports. When we see normalization in China's imports and refinery runs, that will be a key component of the demand balance for the end of the year. China's demand has been critical to supporting prices.

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