Oil headlines are screaming crisis. Futures markets are saying something different.

Bianco Research President Jim Bianco wrote on X Monday that crude oil futures for 2027 delivery are trading in extreme backwardation. The calendar spread between the April and September contracts sits at minus 25% — a record since the mid-1990s.

Near-Term Spike, Not A Sustained Shock

Deferred contracts confirm the picture. The March 2027 contract is up just 9.99%. The April 2026 contract is up 53%.

“The charts and table above show the market is pricing a short disruption of a few months in oil and not a significant elevation that ‘persists for the year,'” Bianco wrote.

Why Infrastructure Damage Is The Key Variable

Bianco cited the absence of structural damage as central to his reading.

“When the ships start moving again, the system will start supplying the world with crude,” he wrote. Tankers remain out of the Strait of Hormuz, keeping Middle East storage full and production slowing — but no long-term damage has been reported.

USO Surges As WTI Pulls Back From $119

The United States Oil Fund LP (NYSE:USO) is trading up 5.52% at $114.77 Monday.

WTI crude futures briefly surged to around $120 per barrel during the session before pulling back below $100. Brent climbed to $98.31 before also trimming gains.

The pullback came after the G7 said it stands ready to release oil from strategic petroleum reserves if needed. G7 nations are reportedly discussing a coordinated release of 300 million to 400 million barrels from their collective 1.2 billion barrel emergency stockpile.

U.S. President Donald Trump is also expected to announce measures to ease the oil price surge. A coordinated reserve release is among the options under consideration.

Photo by ImageFlow via Shutterstock