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Oil futures having a hard time rising much in anticipation of the scarcity barreling down toward us all when—as we saw last week—jawboning can dump prices by $10 and blow folks out We'll need physical markets to drag paper barrels to wherever clearance price is required of them
Had a great conversation with @KYRRadio and @pineconemacro about oil markets and Iran War. Check it out: https://t.co/n3LlJdESeO
Gulf shipping insurance soars. Bloomberg: "The cost of coverage has leaped to about 5% of the value of a ship" At the beginning of the war, it was 0.25% (see FT piece to right) 5% is... insane. You're simply not paying that if you...
Iranian Foreign Minister: “Any claim to the contrary appears geared solely to mislead oil traders” 😅 There’s a whole battle of the jawbones happening on top of the acute physical market disruption.
🚨 NEW POST 🚨 Latest OPEC+ production data heading into the Iran War, as well as estimates of how much production has already been shut in across the Gulf By my tally we're currently sitting at ~8.5 MMbpd confirmed shut it, with...
Platts Dubai crude (balance of the month) just broke above $150 per barrel. Extreme scramble for Middle Eastern physical barrels continues. https://t.co/HsxSuMbbVJ
"sources have said all offshore production is now offline" Shut-ins also include some onshore wells. https://t.co/3NlzDrbslp
BBG: "Kuwait Oil Output Falls to About 1.3m B/D With Hormuz Still Shut" Output down to ~1.3 MMbpd vs 1.6 MMbpd last month. Kuwaiti shut-ins have risen to around 1.3 MMbpd from 0.5 MMbpd last week.
The funny thing about the Trump admin trying SO hard to jawbone down the price of oil is that the main thing they're accomplishing, beyond a temporary political reprieve, is a delay in the production response from US shale producers.
"Trump is also weighing a seizure of Iran's critical oil depot on Kharg Island — a move that would require U.S. boots on the ground — if tankers remain bottled up in the Persian Gulf, U.S. officials say." He realizes that...
Because some folks seem confused: I think it’s really bad that shipping through the Strait of Hormuz is halted, and it would be better for pretty well everyone (except Russia) if traffic resumes It will be utterly miserable for billions of...
A barrel of oil lost anywhere is a barrel lost everywhere. It’s a global market and acute scarcity in the Middle East/Asia will inevitably spike prices in North America as markets work to incentivize cargoes to fill the hole. US foreign policy...
“As a matter of fact, the Strait of Hormuz is open … It is only closed to the tankers and ships belong[ing] to our enemies, to those who are attacking us and their allies. Others are free to pass” -...
Spent most of my career talking down the endless stream of unjustified oil market alarm. Now I’m acutely alarmed to the point of disbelief, the oil market is still shockingly sanguine, and I feel like this guy. https://t.co/5r44qi5Dxz
Iranian tankers back to loading at Kharg this morning despite yesterday’s US strikes on the island, which currently stages the vast majority of Iranian exports.
While the prompt Brent timespread has actually weakened a bit from last Friday, it's largely because the rest of the curve is rallying more aggressively than the front. Brent curve backwardation slightly shallower at the front vs last Friday, but backwardation...
Crude prices aren't what will ultimately drive the necessary demand destruction should the Strait of Hormuz remain closed. That job will fall to refined product prices, the things we as consumers actually consume. Singapore spot jet fuel prices are there already, over...
Crude futures aren't telling the full story. See Dubai physical swaps (white, balance of the month) vs Brent prompt futures (blue) below. Normally they're pretty close, but right now there's a MAD bid for physical crude in the region—$100/bbl futs, $140/bbl physical...
Everyone wants a Hormuz EZ-Pass but Tehran's primary leverage is keeping the Strait closed to *all* traffic. It's the total supply flow lost—not the destinations— that ultimately matters. And no guarantee that person with whom you're negotiating is controlling the drones. https://t.co/xNoSi9YCh5
TRUMP: KHARG ISLAND IS 'ONE OF MANY DIFFERENT THINGS' TRUMP: KHARG ISLAND 'NOT HIGH ON THE LIST' At this stage it's pretty obvious that Trump has no interest in further constricting global oil supplies. Even Iranian export flows are a...
Happy Friday, oil watchers. We're now two weeks into the Iran War and crude prices are up ~$30/bbl. That's roughly a $3/bbl gain per day that the Strait of Hormuz has remained closed, a pace that I expect to continue so long...
🎙️ NEW PODCAST 🎧 In the latest episode of the Oil Ground Up podcast, I spoke with @ncitayim for a view on the Iran war from one of my absolute favourite OPEC and Middle East oil analysts, reporting from the Gulf. (Link...
NEW: US Treasury issued a general license for the delivery and sale of Russian oil loaded on vessels as of March 12. Moscow continues to be the single largest beneficiary of the Iran War. https://t.co/oVlT1gzuuN
Cramer getting sassy about Iran not having the cards to force oil to $200/bbl by citing the US experience in the... Vietnam War? I've LITERALLY NEVER BEEN SO BULLISH. https://t.co/d8799zIp8i
Ah yes, Trump admin clearly always planned to for the Iran War to go this far and to have the Strait of Hormuz shuttered. That's why they didn't pre-plan any of the insurance facilities, SPR releases, or have enough naval assets...
The core issue with this is that the Iranian regime remains deeply fractured—there is no one voice in Tehran One group may agree to some deals for passage, but impossible to say that said deal will be honoured by the other...
Brent crude price, Iran-War-to-date My expectation is that this rough/steady slope will hope, grinding $3+/bbl higher each and every day this crisis persists, always with the possibility of big lurches higher should Iran successfully take out major regional oil infrastructure. https://t.co/nwGMcg7rja
🚨 Mid-week Iran War and oil market update for Commodity Context subscribers. More regular coverage of the acute volatility across the increasingly strained oil complex in Oil Context Weekly tomorrow. https://t.co/lvkkTTJr9s
Trump shifting his own feedback calculus: high oil prices are good now. Let's see how long that lasts.
If the Trump admin is suspending the Jones Act you better believe that they're pretty darn close to some kind of petroleum export restrictions. Those will make the *domestic* US pricing environment more tolerable for a few weeks—after which it will...
We've already lost roughly a quarter *billion* barrels in cumulative oil supply thus far in the Strait of Hormuz stoppage.
About to jump on CNBC @asiasquawkbox to talk about the Iran War, the Strait of Hormuz, the latest tanker attacks in the Gulf, and tonight’s jump in the price of crude. Tune in! https://t.co/myMaR7VRA7
Brent crude pops back toward $100 because, well, hard to say why it wasn’t there already https://t.co/SGjbVYODt2
Finally, some US SPR detail. Reportedly beginning next week. Still no mention of official flow rate (what really matters), but Sec Wright said the drawdown would last ~120 days which yields ~1.4 MMbpd draw pace. (Biden admin managed ~1 MMbpd max drawdown rate...
US price-to-production response is typically ~6 months. In an exceptional situation, like now, maybe we could get that down to ~4 months? But if the Strait is still closed in 4 months the entire global economy is pretty well screwed.
Price spikes will hurt a lot, but they're the luxury position--much better to have pump price pain than outright physical shortages, as will be suffered by much of the developing world. This is how you guarantee shortages in this context. https://t.co/jRUy3woUSl
Iranian President: ""The only way to end this war ... is recognizing Iran’s legitimate rights, payment of reparations, and firm int'l guarantees against future aggression." https://t.co/3nWzoC6kb8
If governments lean too hard into fuel subsidies this is going to shift from necessary demand destruction to rolling fiscal crises.
OPEC+ crude production rose more than 400 kbpd m/m in February according to just-released OPEC data, with the bulk driven by the ongoing Kazakh recovery. Unfortunately it's immediately worthless given GCC crude exports were throttled immediately thereafter by Iran War. https://t.co/jTQxOjrt4b
Missiles, then drones, then mines, now underwater high-speed missiles. For Iran's next trick to keep the Strait closed: https://t.co/98z3siY3mA
Important to note that the EIA’s Short-Term Energy Outlook (STEO) doesn’t take a firm position on discretionary White House policy. I actually really like the STEO, but it’s not built for a moment like this, which demands Strait closure duration scenarios,...
Uh. This would be REALLY bad. Up until now, traffic through the Strait has been functionally halted but it isn’t exactly *closed*, ships can are some are taking the risk. If Iran successfully mines the Strait, it’s *closed* closed.
Oil production around Kirkuk, in Iraqi Kurdistan, is connected to global markets via a pipeline to the Turkish port of Ceyhan This is Iraq’s only crude supply that can bypass the currently-closed Strait of Hormuz Shut-ins in the Basra area by the...
Most of the crude that ships out of the Strait of Hormuz is medium-to-heavy sour Western Canadian Select at Houston vs WTI, which reflects a clean light-heavy quality differential, had weakened (widened) on Venezuela reentering the USGC market—Hormuz closure entirely reversed...
🎙️ I was thrilled to rejoin @TheStalwart and @tracyalloway on the Odd Lots podcast to discuss the historic and ongoing disruption of traffic through the Strait of Hormuz, through which ~20% of the world's oil flows. This is it. This is...
This isn’t over and the current market reaction, by reducing pressure on Trump, is only elongating the duration of the crisis and the physical disruption through the Strait of Hormuz. https://t.co/bMeee4CJjz
This may be tame relative to Monday’s insanity, but let’s just be clear that $6/bbl intraday crude price swings are not the sign of a healthy or settled market. https://t.co/n5HX62ltNm
No doubt a day for the oil market history books. Nearly $35/bbl of intraday crude price chomp is wild. And this is far from over yet. https://t.co/nrgOddtT5n
A barrel lost anywhere is a barrel lost everywhere. And we just lost one-fifth of everywhere barrels. No one is safe.
A really important feature of this current market is that it’s physical participants’ (ie refiners) scramble for barrels—and not spec sentiment—that’s driving insane $ spike & explosion of backwardation We already saw this last week, when spec was net ~flat despite...
