Morgan Stanley Says War-Weary Oil Traders Shun Long-Term Bets

Morgan Stanley Says War-Weary Oil Traders Shun Long-Term Bets

Morgan Stanley Says War-Weary Oil Traders Shun Long-Term Bets

Yongchang Chin

Updated Wed, September 9, 2026 at 12:00 PM GMT+3 2 min read

• CL=F +6.28%

(Bloomberg) -- Oil traders are growing increasingly cautious about longer-term positions as the wars in Iran and Ukraine cloud the outlook beyond the next few months.

Most Read from Bloomberg

Traders are concentrating derivatives positions over shorter time horizons and becoming more "clinical" about risks, said Brendan Ross, Morgan Stanley's co-head of global oil trading. They are now more selective, shifting from broad derivatives exposure toward specific instruments as geopolitical risks mount, he added.

"People have been more precise with their risk," Ross said at the Asia Pacific Petroleum Conference in Singapore on Wednesday. "They've decided what they really want and what's an unexpected bleed."

Oil markets have been whipsawed by rapidly shifting developments in the US-Iran war and continued hostilities between Russia and Ukraine. Off-and-on negotiations between Washington and Tehran and repeated Ukrainian attacks on Russian energy infrastructure have fueled volatility across energy markets. Brent crude has swung between about $60 and $126 a barrel this year, while refined fuels have seen even sharper moves.

Traders are looking into their basket and throwing out risks they don't really want, which has fed into a lack of liquidity especially for longer-dated contracts across markets, Ross said.

"People are really just trading the market on a front three to six month basis, and then the illiquidity feeds into more illiquidity," for contracts further out, he said.

Oil products have faced the sharpest impact from the conflicts as disruptions to production and trade tightened global supplies. US retail diesel prices hit a record last week, while fuel costs across Europe have soared as a global shortage deepens.

"In terms of the physical-financial dislocation, clearly it's been mostly in product markets," Ross said.

Most Read from Bloomberg Businessweek

©2026 Bloomberg L.P.