[Analysis] "Brent at $110 seen as the upside cap…Oil-price stability could ease downside pressure on crypto assets"

An outlook has emerged that downside pressure in the crypto-asset (cryptocurrency) market could ease, as analysis suggests that the rise in global oil prices may remain limited even amid tensions in the Middle East.

On the 9th, Binance Research said via X (formerly Twitter) that “$110 for Brent already reflects a scenario in which the Strait of Hormuz is blocked for more than a month,” adding that “the upside in oil-price gains appears to have been capped.”

The research note said policy tools and supply-adjustment mechanisms that have not yet been fully deployed remain available. The US Strategic Petroleum Reserve (SPR) is maintained at about 700 million barrels, and a release is being discussed if needed. Among International Energy Agency (IEA) member countries as a whole, there are roughly 4 billion barrels of stockpiled crude, but a coordinated release has yet to take place.

Alternative transport routes were also assessed to still have some spare capacity. Saudi Arabia’s East-West pipeline and the United Arab Emirates’ (UAE) Habshan-Fujairah pipeline theoretically have transport capacity of about 3.6 million barrels per day. Current utilization is around 0.9 million barrels per day, with temporary bottlenecks—such as port congestion and shortages of bunker fuel—reported to have had an impact.

The report also assessed that Iranian crude is partially returning to the market via transshipment hubs and overland routes. It said supply of about 1.5 million to 2.0 million barrels per day is estimated to be re-entering the market through bypass routes.

It also noted that the analytical framework in the oil market has recently been shifting. “The market’s focus is moving from the scale of supply disruptions to assessing their duration,” the report said, adding that “when there are signs that physical constraints may ease, geopolitical risk premia tend to come under downside pressure.”

Accordingly, it projected that Brent prices are likely to move in the $100–$110 per barrel range in the near term. “In the short term, a rangebound move between $100 and $110 is expected,” the report said, adding that “if diplomatic progress or normalization of alternative supply routes is confirmed, prices could be quickly recalibrated to the $80–$90 range.”

The analysis said such oil-price stability could also affect the crypto-asset market. “The worst macro scenario for the crypto-asset market was based on a situation in which oil prices continue to rise,” the report said, adding that “if tensions ease around the current level of about $110 and policy tools are brought to bear, the upward trend in oil prices is likely to be limited.”

It continued, “This suggests selling pressure driven by risk-off sentiment may have bottomed, and could support stabilization or a rebound in the crypto-asset market.”