Consumption remains precarious, with parts of Hong Kong locking down, some Shanghai residents banned from leaving the city and the U.K. prime minister signaling restrictions may last for months. Traffic in New York fell from a month earlier.

Despite the concerns over day-to-day demand, physical crude-buying for the coming months has firmed in recent days. A flurry of purchases by Chinese, Indian and Thai refiners has supported prices, while key swaps tied to the North Sea market are at the strongest level in 10 months. That’s keeping the futures curve in a bullish structure known as backwardation.

A pullback in oil futures has been on the cards, with crude trading near its highest level in almost a year. Investors have flocked back to commodities as frigid winter weather and hopes of a big economic stimulus from U.S. President Joe Biden support buying interest. Saudi Arabia’s unilateral output cut also eased oversupply concerns, helping reshape the oil futures curve.

“The reflation trade is not dead,” said Ole Hansen, head of commodities research at Saxo Bank A/S. “But for now it’s pausing, and that could leave many markets overexposed.”

The Biden administration’s initial steps — including a suspension of the sale of oil and gas leases on federal land, a focus on fiscal spending and a likely delay in lifting sanctions on Iran — may help tighten the oil market this year and next, Goldman Sachs Group Inc. said in a note. A speedier vaccine rollout could also boost jet-fuel demand, it said.

Iran, meanwhile, has started ramping up its oil production and expects to reach pre-sanctions levels in one to two months, according to Deputy Oil Minister Amir Hossein Zamaninia. The market will be able to accommodate the country’s maximum output of around 3.9 million to 4 million barrels a day, he said. But risks for any buyer remain as long as U.S. sanctions are in place.