Oil Extends War Premium Gains Amid Ongoing US-Iran Hostilities

The energy complex is off to yet another strong start this morning with the ‘big four’ contracts (WTI, Brent, RBOB and HO) all poised to open today’s formal session with 2.5%-3.5% gains as the U.S. continues its airstrike campaign against Iran for a third consecutive night.

Some analysts anticipate this volatile war/price action will be the new normal for the Strait of Hormuz/Oil futures. As of now, it doesn’t seem that a price premium that assumes a total blockage of the Strait has been added back into the market since the shooting resumed over the past week. Rather, the market seems content with a form of half measure, one that includes assumptions that the sputtering start/stop of missiles flying and ships traversing will carry on for the foreseeable future.

The D4 RIN price rally seems to be taking a breather, for now, after a 2026 that has seen the price more than double since January. While some might see this as a potential correction in the price of the biomass-based RIN to fall back in line with it’s previously highly-correlated commodity counterpart, soybean oil futures, it’s important to note that D6 RINs (ethanol) have been separated from their related commodity almost all year. Further, the administration hasn’t shown any sign of relenting on their unprecedented RFS mandate, which carries with it the reality that producers simply don’t have enough RINs to be compliant.

All quiet on the Eastern Front: the National Hurricane Center does not anticipate any cyclonic development in the Atlantic basin over the next week, holding true to their below-normal predictions they published two months ago.