Spot prices vs futures contracts: the market equation - 7 april 2026

With the Brent spot price above $100 compared with $80 for December 2026 futures, financial markets are caught between immediate tensions and expectations that the Persian Gulf crisis will be resolved. We model the impact of these factors on European equity and bond markets.

Although the Persian Gulf crisis also affects other critical sectors – natural gas, fertilisers, helium – the Brent crude price remains investors’ preferred barometer. However, the spot price alone is not sufficient for analysis: all the signals coming from the oil market need to be considered.

Since the beginning of the crisis, longer-dated contracts have underreacted to the rise in the spot price, reflecting a consensus that the crisis will be short-lived. This divergence has widened since 23 March, when Donald Trump mentioned potential negotiations: while the spot price climbed significantly above $105 per barrel, the December 2026 contract fell back to $80 (Chart 1).

Overall, oil markets are pricing in a gradual return to pre crisis levels over the second half of the year, with Brent crude ending the year only a few dollars above its 28 February price.

For the time being, the US administration’s communication is proving effective on at least one crucial front: it is anchoring market and economic agents’ expectations around a scenario of a relatively short lived crisis. This does not mean there will be no economic damage – there already is – but the prospect of de escalation helps limit the risk of a drastic shift in behaviour by firms and households.

Jerome Powell, in his 30 March speech at Harvard University, is also contributing to this communication strategy. While remaining cautious, he referred to a temporary rise in inflation that should not influence the Fed as long as medium term inflation expectations remain anchored. Meanwhile, the ECB has slightly adjusted its stance: in line with its mandate, it remains very firm on inflation risks, but it also stresses the significant role of expectations, which currently remain very stable.

Financial markets are therefore subject to two conflicting forces: on the one hand, tighter conditions in energy and commodity markets, with occasionally imminent risks to supply; on the other, the easing effect of expectations of de escalation, as reflected in oil futures prices.
Our econometric model suggests that the combination of these factors – the oil spot price and the spot–futures spread – explains 65% of the variance in the Euro Stoxx and 81% of the variance in five year German bond yields (Chart 2). Between the two components, spot market tensions dominate at 55% versus 45% for de escalation expectations, for both equities and bonds. In practical terms, markets would remain broadly stable if a $10 increase in the spot price coincided with a $2 fall in the December contract.

What still needs to happen is for the de escalation scenario to materialise, either through an official announcement of serious negotiations between the United States and Iran, or through military and/or diplomatic developments that put an end to the blockade of the Strait of Hormuz. It remains a race against time: communication is a valuable tool for containing the risk of a global recession, but only for a limited period.

In this still highly uncertain phase, which calls for flexibility in portfolio management, our Global Macro strategies continue to be managed mainly through movements in futures and index options.