Oil has had a massive run, but a prominent bull sees a turning point on midterm eve

By Jules Rimmer

Former Goldman and Carlyle strategist is cashing in on crude's rally this year

Brent fell from a high of around $114 last week to as low as $104 on Monday

Jeff Currie is a big name in oil markets. He's been on bullish on oil since the pandemic, a stance he doubled down on this year when the Iranian crisis kicked off.

Now he's telling investors it's time to book profits on the trade in the short-term for two reasons: first it's gone up a lot, and fast; second, escalation in Hormuz is mutually destructive for both parties.

The founder and chief executive officer of Real Macro, Currie was formerly the chief energy strategist at both Carlyle Group and Goldman Sachs. In an X post on Monday, Currie went to great lengths to explain how and why he differentiates between his short and long-term views on the oil trade.

Jeff Currie is founder and CEO of Real Macro

He reckons that while it's an opportune moment to bank gains on what he calls "prompt oil" (the spot price or short-dated futures contracts) and refined products, he still thinks there is a "structural supercycle" intact that will keep energy prices elevated. Moreover, longer-term trades, or beneficiaries of high oil prices, like rigs, oil service companies, bypass capacity, power and storage solutions are still in an upswing.

Currie made his main, overriding bull call in October of 2020, predicated on a trifecta of themes: deglobalization, electrification and monetary debasement (weaker fiat currencies enhanced the appeal of physical commodities). In his opinion, the Hormuz conflict didn't start those trends, but rather accelerated them.

Since he made his forecasts in autumn 2020, the S&P Goldman Sachs Commodity Index XX:SPGSCI has returned about 260%, compared with around 120% for both Nasdaq NDX and the S&P 500 SPX indexes.

Currie's recommendation to cash in now is mainly because "escalation would be so catastrophic for food and supply chains that neither side will pursue it, while a lasting deal is equally elusive." Brent's (BRN00) 75% rally so far in 2026 is sufficient reward for Currie.

He predicts a situation going forward he characterizes as "Schrödinger's Strait," whereby the chokepoint in the Iranian gulf is theoretically open but in practice, still closed. The way to trade the uncertain future, Currie argues, is to exploit the rebuilding of stockpiles, the drive for energy security and resilience on behalf of many countries. This suggests investing in oil infrastructure and logistics plays rather than oil itself.

Currie's sense of timing was pretty acute. As Deutsche Bank chief economist Jim Reid pointed out in his "Early Morning Reid" daily market bulletin Tuesday, some of Monday's massive slump in oil was owing to a contract rollover, but nonetheless, "if you simply take the new active January contract for consistency, Brent crude still fell 7.63%". Talk of renewed negotiations for a settlement between the U.S. and Iran were cited to explain the decline.

Robin Brooks sees fair value on Brent around $87. The rest is risk premium.

Robin Brooks, senior fellow at the Brookings Institution, has made the case for several weeks that the risk premium in the oil price was exaggerated, especially since shipments through Hormuz have normalized. In an X post on Monday, Brooks said he believes $87 per barrel is probably the right price and that's why oil prices tumble on any rumors of a negotiated settlement.

In Monday morning trading, Brent was trading at $106.45, up 1.6% on the day after reports of the U.S. striking Iranian targets overnight.

-Jules Rimmer

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