A Wall Street veteran says Brent crude has become an "emotion contract" and has decoupled from the real world.

Wall Street veteran Jeff Currie said the world's most important oil benchmark futures have now become almost a "sentiment contract," undermining its usefulness as a tool for managing price volatility. "Everything energy-related is rallying, except Brent crude," Currie said in an interview on Thursday. "It has become disconnected from the real world." Currie is the founder and chief executive officer of investment firm Real Macro. He said Brent crude's current price of about $106 a barrel does not reflect the degree of threat to supply from the Strait of Hormuz to the Black Sea region. Threats facing the oil market have recently escalated further, with frequent attacks on tankers around the Strait of Hormuz and intensifying Houthi attacks on Saudi Arabia. The freight market has also surged. Currie said that as the global environment deteriorates, the disconnect between Brent crude and the physical market is creating "unpriceable risk," making hedgers reluctant to use the contract precisely when they need it most to protect themselves. "These futures markets are absolutely critical to the functioning of an industry in modern society," Currie said. "If you lose this pricing mechanism, there won't be enough investment, and there won't be enough behavioral adjustment."