Hormuz Crossings Offer Minor Relief, Not Production Recovery
It's important to mentally separate eastbound (i.e., exiting) Hormuz ship crossings from the restart of shut-in Middle Eastern production. There's ~175 million barrels of petroleum on tankers floating, tapped in the Middle East Gulf (MEG). That's effectively a quasi-strategic stock at this stage. A pickup in Hormuz crossings is basically like a little SPR release, drawing down that stock and making it accessible to the market. But while a helpful relief, that crossing by itself doesn't change the ~13-15 MMbpd (higher number now includes Iran) of shut-in MEG production, the cumulative loss of which now stands at >700 million barrels. Only thing that'd do that is getting new, empty tankers into the MEG (i.e., westbound entries), the loading of which will draw down bulging onshore stocks, relieve egress bottleneck, and begin to facilitate restarts.
Japan's SPR Draw Outpaces US at 1.5 MMbpd
Between the end of March and beginning of May, Japan drew down crude stocks—mostly its SPR—at a rate of ~1.5 million barrels per day. Japan's SPR releases started much more quickly than the US' and that 1.5 MMbpd *average* draw rate...
Not All Market Interventions Equal Manipulation
We need more specific language when talking about "market manipulation," which like most things is a spectrum. Unprecedented Trump/White House jawboning and verbal interventions: obviously happening, manipulative in that they successfully moves markets, but fair game (if irresponsible) and not what...
Hormuz Sovereignty Never a Pre‑war Issue, Now Contested
It cannot be stressed hard enough that Hormuz sovereignty was never a sticking point prior to the war. This is the reality that was shattered, and we aren't going back. Iran threatened the Strait plenty, but it was always largely bluster and...
Brent Futures Slightly Below Dated Brent, No Major Dislocation
Prompt Brent futures are currently $103/bbl, while latest Dated Brent quote is at $105/bbl. Hardly the stuff of acute dislocation. World is in a record supply deficit, though at this stage market still choosing to be more patient re: accumulating the consequences...
Iran Proposes Uranium Transfer, Rejects Facility Dismantlement
US-Iran negotiations latest, via WSJ: - Iran offered to dilute/transfer some of its stockpile of highly enriched uranium to a third country - called for guarantees the transferred uranium would be returned if talks fail - rejected the idea of dismantling its nuclear...
US Tone on Iran's Uranium Softens, From Acquisition to Observation
On Iran’s enriched uranium, “We’ll get that at some point…” and the US is “watching it” from space is actually a pretty big step-down from even his [latest] position earlier this past week that the US would “get it” (which...
Pakistan, Iran Negotiate Limited Qatari LNG Transit Through Hormuz
Bilateral Hormuz dealmaking continues parallel to any fuller peace deal negotiations: “Pakistan held talks with Iran to allow a limited number of Qatari liquefied natural gas cargoes to transit the Strait of Hormuz, as Qatar sent through its first shipment...
Iran's Delays Defy Expectations of Time Pressure
Guys, why is Iran taking its sweet time? I was assured that time was not on their side. https://t.co/CAnxzIdQdX
Falling Imports Reflect Export Collapse, Not Demand Destruction
falling imports isn't demand destruction, guys imports *have* to fall because exports have collapsed, going back to the discussion about the end of the "air pocket" then you draw down stocks, then prices rise, and then you destroy demand
Only the Original 151 Pokémon Matter Here
Trying to teach the senior intern that, despite what this super duper extra deluxe essential handbook says, in this house we only recognize the 151 OG Pokémon. https://t.co/QUbfFjMHjw
Today's Gas Futures Mirror 2022 Peak, Pre‑war Levels
US gasoline (RBOB) futures curve today (white), the day before the Iran War kicked off (blue), and around the all-time highs of June 2022 (orange) https://t.co/v35dgEexze
US Gasoline Crack Spread Surges, Matching 2022 Levels
US gasoline crack spread (i.e., refining margin) continues to ratchet higher. WAY above the norm, currently tracking 2022's trajectory. https://t.co/h2HPzueo5V
Iran Seizes Its Own Crude Amid Booming Trade
When your Iranian oil trade is so hot that Iran seizes its own crude back. https://t.co/LSKsv5pbu8
Trump Dismisses Iranian Port Strikes as Mere Love Tap
Iranian port strikes were just a ‘love tap,’ says Trump. https://t.co/fMjcP1QM5z
Tiny Brent Swing Now Just Another Thursday
Brent went from a $5/bbl decline to a $2/bbl gain today. Once upon a time that would have been a really remarkable day. Now it’s just Thursday. https://t.co/LZ2YTU2NNo
Unusual, Concentrated Oil Volumes Precede Key Announcements, Says Onyx Founder
Reuters: "Let's stay with the facts. The volumes were highly unusual. They were concentrated. They were ahead of key announcements," said Jorge Montepeque from Onyx Capital Group, who helped design the modern system of setting oil prices at pricing agency...
Twitter Sees Surge in Account Phishing Attacks
Heads up that I get a ton of these now. Big uptick in Twitter account phishing attacks across the board. https://t.co/5Ggkp4BPir
Hormuz Crisis Sparks Oil Shock and Market Outlook
🎙️ NEW PODCAST 🎧 On the latest episode of Oil Ground Up, I'm joined by the one and only @ericnuttall to talk about the ongoing Hormuz crisis oil supply shock, how oil and gas equities are pricing the conflict, and what...
Markets Remain Calm Amid Two-Month Iran War
I had the pleasure of joining @PTertzakian & @JackieForrest on the Arc Energy Ideas podcast to talk about the shockingly calm market reaction to more than 2 months of Iran War—what I call the Sanguine Strait Stoppage. Long-time listener, first time...
USGC Crude Rerouted Through Panama to West Coast
Great map of Jones Act-waived intra-US petroleum flows. Some of it is intra-PADD optimization, but as expected we see a big push of USGC barrels transiting the Panama Canal to the US West Coast.
Estimating Timeline Until Hormuz Returns to 50
How much longer, from today, does it take for the Strait of Hormuz to reopen**? **defined as >50% of pre-war transit levels
Only a COVID‑scale Demand Shock Offsets Hormuz Closure
"only thing that could possibly offset the supply lost due to the closure of the Strait of Hormuz would be another exogenous COVID-level demand destruction event" https://t.co/PPzI5Mt2Ni
Brent Outpaces S&P 500 in the Past Five Trading Days
Brent crude prompt futures (white) vs S&P 500 futures (blue) over the past 5 trading days https://t.co/EFvg7xDNWL
Oil Traders Guard Downside, Fear Market Gullibility Loop
I absolutely don't think oil traders are "stupid" or "gullible", as per the tone on here. They just very reasonably want to protect their downside, and are [legitimately] worried that everyone else in the market *is* gullible. So we loop. https://t.co/9KEL3rT02a
US Crude Exports Plunge 1.7 MMbpd, Volatility Persists
EIA weekly data showing a sharp 1.7 MMbpd pullback in crude exports for the week (to still very high levels). That's a ~12 MMbbl weekly swing in the call on US stocks. ⚠️ Export data is especially volatile. https://t.co/pPxWDqXQ4w
US Gasoline Imports Hit Record Lows, Watch Weekly Data
In addition to inventories and booming exports, be sure to keep an eye on weekly import estimates in today's EIA weekly data release. Overall US petroleum imports have been running pretty low, and have been especially low for gasoline. https://t.co/qoDnrbjwLO
EIA Weekly Data Release Sparks Unprecedented Calendar Block
Can't remember the last time I was this excited for a EIA weekly data release. Legit blocked my calendar. https://t.co/CrokkiCkKd
Trump Cancels Policy, Strait Stays Closed, Markets Rally
Secretaries of Defence and State spend all day talking about how Project Freedom is super necessary and a fantastic success Trump then abruptly calls off the two day old policy to “guide” ships through Hormuz. The Strait remains closed. Oil falls, equity markets...
Strait of Hormuz Turmoil Sends Shockwaves Through Oil Markets
Spoke with CBC's Power and Politics this evening about the chaotic past 24 hours in the Strait of Hormuz and what it all means for oil markets. https://t.co/WgW8feXlpU
Trump Predicts Iran War Will Last Two Weeks
Well, Trump says the Iran Iran War could drag on for another two to three weeks… … again https://t.co/y2mTL9jULA
Morning Hormuz Updates Require Coffee First
every morning we wake up and check the latest news from the Strait of Hormuz best not to attempt this feat before you've had your first coffee https://t.co/QUiFormLeI
Crude Jumps on Unconfirmed Iranian Attack, Shipping Reports Swirl
gm, crude popped this morning on reports that Iran hit a US warship (CENTCOM has since denied) before pulling back Mixed reports of additional Iranian attacks on commercial shipping over past 24 hours, while Trump claims this AM 2 US-flagged ships...
Foreign Buyers Paying Premium Keeps U.S. Stock Draws Steep
Of course, there is no additional oil, beyond the SPR release—just the rest of the world still willing to pay more than Americans for American barrels, at least for now. So long as that’s true, more steep stock draws cometh. https://t.co/BvLo10lL0S
Foregone Gulf Oil Costs Exceed $60 Billion
Cost of foregone Gulf oil production alone—not counting LNG, fertilizer, helium supply chain consequences—is currently valued at $60+ billion.
Join Saturday 7 Am Talk on Rising Oil Prices
“Hi, would you be interested in joining us for a conversation about oil prices at 7am Saturday morning?” https://t.co/28SRRhRIua
US‑Iran Talks Stall, Oil Stocks Dip Another 100 M Barrels
Every weekend half my feed expects a sudden breakthrough in US-Iran negotiations and the other half expects a sharp resumption of bombings. Of course, the most likely outcome is that absolutely nothing changes and we do this again next week, down...
Crude Prices Surge as Iran War Persists, UAE Exits OPEC
🛢️ OIL & IRAN WAR CONTEXT WEEKLY 🛢️ Crude prices climb amidst ongoing deadlocked diplomacy, the third month of the Iran War, breaching the billion lost barrel threshold, and the UAE announcing an abrupt departure from OPEC. Summary below, link to full...
Higher Oil Prices Will Cripple Demand, Stalling Rises
"no, oil prices won't rise because demand will be destroyed due to rising prices.." https://t.co/pBEj3OkRN5
July Brent Prompt Surges $9, Outpacing Weekly Gain
Prompt Brent crude weekly price gain: +$3/bbl July Brent, now the prompt contract weekly gain: +$9/bbl
Gasoline Crack Spreads Hit 2022 High Ahead of Summer
US gasoline crack spreads sitting at their highest level since 2022. Brent crude is currently going for ~$107.50 per barrel. New York Harbor gasoline going for $150 per barrel. And summer driving season is about to kick off. https://t.co/nFAPXdyFZx
Brent Prompt Price Shifts From June to July Contract
On the Brent futures contract roll: The "price" everyone typically talks about is the prompt Brent (or WTI) futures price (white on the chart), which is the nearest-dated monthly contract. In April that was set by the June contract (blue), now in...
Oil Market Will Need 2.7 MMbpd Surplus Post‑Hormuz
We're actually really going to *need* a supply glut after this end to fill in the hole left by Hormuz. Minimum 1 billion barrels lost, requires an *annual* surplus of 2.7 MMbpd to recover. And that assumes Hormuz reopens today, which it...
US Commercial Petroleum Inventories Drop Amid Crude Shortage
Sprucing up some EIA charts. Latest on weekly stocks. The total US commercial petroleum inventories **ex-NGLs** is a particularly important adjustment in the current crude-starved environment. https://t.co/gAJ30n96JT
June Brent Expires, July Becomes New Prompt Price
Seeing some confusion on the feed re: Brent prices/volatility and today's expiry. Today is the last day of trading for Brent's June contract (white), and tomorrow the July contract (blue) becomes the "prompt" price most of us see when we search...
Economist's Forecast Proven: Hormuz Strait Still Closed
The Economist cover is right this time [if Hormuz remains closed, which is still is] https://t.co/s9dyaHjaCU
July Brent Price Matters More than June Amid Crisis
June Brent > $122/bbl July Brent >$113/bbl In the current crisis, that July price is a much bigger deal than the June price.
Brent Spot Leads Futures, Backwardation at $123/$120
The latest physical-through-financial Brent curve. Dated Brent at $123.37/bbl today, June futures pushing $120/bbl https://t.co/fiyAh1aKp6
US Petroleum Stocks Tumble, 13.3 M Barrel Draw
Thereeeeee sheeeee goessssss US commercial petroleum inventories fell by a headline 17 million barrels, PLUS another 7.1 million barrels of SPR crude draws. 13.3 MMbbl total crude draw (comm + SPR), 6.1 MMbbl gasoline draw, 4.5 MMbbl diesel draw. https://t.co/81Zl4NqhBb
Officials Warn Two‑month Blockade Could Cripple Tehran's Energy Sector
“Some administration officials believe that continuing the blockade for 𝘁𝘄𝗼 𝗺𝗼𝗿𝗲 𝗺𝗼𝗻𝘁𝗵𝘀 would cause significant long-term damage to Tehran’s energy industry” (emphasis mine) https://t.co/ez3cPo2Ydb