Physical Oil Prices Refuse to Follow Futures Down as Supply Reality Defies Sentiment

Trump Says Iran Doing 'Very Poor Job' Allowing Oil Through Hormuz, Not Honoring Agreement

Global Energy Supply Hit as Middle East Conflict Drives LNG Down 20%, Oil 13%, IMF Says

Global liquefied natural gas flows fell roughly 20% amid the Middle East conflict, while oil supply dropped about 13%, triggering a major energy shock, the International Monetary Fund said Thursday.The disruption has pushed energy prices higher worldwide, with the shock spreading across supply chains and affecting both importing and exporting economies unevenly.Brent crude rose sharply from about $72 per barrel before the conflict to around $120/bbl at its peak, reflecting tight supply conditions and heightened uncertainty, the IMF noted.Although prices have eased from highs, they remain elevated, with many countries paying premiums to secure limited oil supplies in strained global markets.Over 80% of countries are net oil importers, leaving the majority of global economies exposed to rising energy costs and supply disruptions during the shock, the IMF said.The drop in supply has also disrupted refining operations, as facilities struggle to maintain minimum throughput levels amid reduced crude availability.Shortages of refined fuels, including diesel and jet fuel, have affected transportation networks, trade flows, and tourism activity across multiple regions, according to the IMF.LNG markets have been heavily impacted, with supply constraints tightening availability and intensifying competition among buyers.Qatar's Ras Laffan complex, which accounts for about 93% of Gulf LNG output, has been largely offline since early March and may take three to five years to fully recover, the IMF added.The disruption has left Asia-Pacific markets facing acute shortages, given their heavy reliance on LNG imports from the Gulf region.Shipping flows have been affected, with tanker traffic from the Gulf disrupted for weeks, reducing availability of both crude oil and LNG cargoes, the IMF said.The shock is feeding into inflation, as higher energy costs pass through to goods and services, while supply shortages further constrain demand.The IMF stressed that policymakers should avoid unilateral actions, such as export bans or price caps, that could distort markets and intensify global supply shortages.Authorities are encouraged to adopt targeted and temporary fiscal measures to support vulnerable households while preserving longer-term fiscal discipline.Central banks should remain cautious, maintaining a focus on price stability while keeping policy steady unless inflation risks escalate, the IMF added.The IMF said that if inflation expectations rise sharply, policymakers may need to respond with interest rate increases to prevent a broader inflation cycle.Fiscal support should remain narrowly focused, avoiding broad subsidies that weaken price signals and reduce incentives to conserve energy.The IMF added that governments are advised to closely monitor evolving conditions, adjusting policies as needed while avoiding overreaction to short-term volatility.The IMF warned that global fiscal space has weakened, with public debt rising sharply over the past two decades, including across most G20 countries, increasing interest costs and highlighting the need to rebuild fiscal buffers.In tighter financial conditions, policymakers may need to balance growth risks with inflation control, requiring careful coordination between fiscal and monetary policies.Energy conservation measures, including demand reduction policies and efficiency initiatives, are being implemented in several countries to ease pressure on supply.Governments are also rolling out emergency energy-saving measures, including public conservation campaigns, limits on private vehicle use, and expanded remote work, the IMF said, citing data from the International Energy Agency.The IMF also stressed the need for strong global policy coordination, warning that conflicting fiscal and monetary policies could worsen economic instability.The IMF expects demand for balance-of-payments support to rise to between $20 billion and $50 billion due to spillovers from the Middle East conflict, with lower needs if the ceasefire holds.The fund said stronger policymaking in emerging markets has helped limit the scale of support required, adding it remains well positioned to assist its 191 member countries and coordinate responses.

Iran's Crypto-Based Hormuz Tolls Seen Generating Up to $20 Million Daily, TRM Labs Says

Iran's toll framework outlines charges of up to $2 million per vessel for transit of the Strait of Hormuz, payable in crypto or Chinese yuan, with daily revenue estimated at about $20 million, TRM Labs said in a Thursday note.Under the system, ship operators must first contact an Islamic Revolutionary Guard Corps-linked unnamed intermediary and submit detailed vessel data, including ownership, cargo, routing, and crew information for approval.Authorities then screen vessels for links to the US or Israel, with some ships denied passage entirely.Others are categorized under a five-tier system based on "friendliness," TRM said, adding that "friendlier nations" pay lower toll charges.Additionally, payments are negotiated based on crude volumes and vessel classification, with oil tanker fees typically ranging from about $0.50 per barrel to $1/bbl, and rates varying by nationality tier.Additionally, fully laden Very Large Crude Carriers, which carry about 2 million barrels, are expected to pay about $2 million per tanker, according to TRM.For container ships and other vessel classes, charges are negotiated individually.Rates also vary by a vessel's country classification, while fees for container ships and other vessel types are determined on a case-by-case basis, according to the note.Payments must be made either in digital assets or in Chinese yuan via Kunlun Bank or through the Chinese payment network, known as CIPS or the Cross-Border Interbank Payment System, the note added.Following the payment, vessels will receive a VHF-broadcast passcode and are guided through a northern corridor near Larak Island by an IRGC naval escort.Iran's use of digital assets for transit tolls marks a notable example of cryptocurrency enabling state-level sanctions evasion, with payments routed outside traditional financial systems, TRM Labs said.Iran formalized the framework through its Strait of Hormuz Management Plan in March."At current traffic levels, public estimates suggest the toll system could generate up to $20 million per day from oil tankers alone, with $600-800 million per month possible if liquefied natural gas vessels are included," according to TRM."The unnamed intermediary administering toll collection remains publicly unidentified - a critical gap for any future enforcement or sanctions action targeting the payment network," according to TRM Labs.Crypto transactions enable faster settlement outside US banking channels, making it difficult to monitor or block payments in real time, the note added.Despite a Pakistan-brokered ceasefire taking effect on Apr. 7, tolls remain active, TRM said."Tolls remain in effect, and Iran's institutional infrastructure... suggests no near-term rollback," according to TRM.