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Oil Market Overpricing Prospects for Durable Hormuz Ceasefire, RBC Says

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Oil markets may be overestimating the likelihood and impact of a near-term agreement between the US and Iran following renewed military clashes in and around the Strait of Hormuz, RBC Capital Markets analysts said in a note on Thursday.

The comments followed reports that Washington and Tehran were considering a 60-day ceasefire extension tied to negotiations and unrestricted navigation through the strategic waterway. The US intercepted four Iranian drones in the Strait of Hormuz and struck Iranian military positions near Bandar Abbas on Thursday.

"We would caution readers that we have been here before," RBC analysts wrote, noting that similar reports of an imminent memorandum of understanding surfaced three weeks ago without producing a lasting breakthrough.

RBC said any interim agreement would likely allow only limited and largely one-directional tanker movements, leaving significant logistical obstacles to restoring normal shipping flows. The bank added that Feb. 27 could ultimately represent the peak for Hormuz tanker transits "for the foreseeable future."

Western shipping companies may also remain reluctant to resume normal operations due to persistent risks from missiles, drones, and naval mines, as well as elevated insurance costs and sanctions-related legal complications involving Iran's Revolutionary Guard.

The analysts noted that since the conflict began, observed global inventories have fallen by roughly 150 million barrels, including about 115 million barrels from SPR drawdowns. Excluding the Middle East, inventories are estimated to be down closer to 200 million barrels.

Asia-Pacific inventories have seen the steepest declines, while Middle East crude stocks have risen as stranded Gulf supplies accumulated in storage. RBC said the supply outlook remains largely unchanged and expects inventory draws to continue until demand destruction becomes more severe.

"Finally, we do wonder whether some elements in Iran are in favor of maintaining the current no -war, minimal -oil status quo, believing that the country's bargaining position will improve once summer is in full swing, and the economic impact of inventory drawdowns becomes more difficult to diminish through headline management," the analysts said.

Separately, RBC highlighted accelerating US natural gas infrastructure development, with nearly 32 Bcf/d of pipeline capacity already under construction or partially completed for 2026 and 2027, much of it tied to LNG export growth and Permian takeaway expansion.

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