Kip Herriage
Founder & Managing Partner of Vertical Research Advisory
WTI crude is headed into the $50s as it becomes apparent the US has control of the strait and Iran has lost its grip. Tanker trackers count at least 15 ship-to-ship transfer sessions in the Gulf of Oman carrying 25 million barrels of crude from almost every country in the region except Iran. x.com x.comÂ
Crude oil should fall into the $50s within the next 30 to 60 days, alongside a collapse of Iran's IRGC and a turn to pure disinflation. Disinflation should be the primary trend well into the 2030s as rates plummet, with the 10-year yield below 4% in Q4 and 3.5% in Q1 2027. Kevin Warsh is most certainly not a hawk. x.comÂ
More oil passing through the Strait of Hormuz and continued OPEC and Russian production should push crude oil lower. It has fallen from about $106 to $96 over the past month. x.comÂ
Crude oil's latest drop reflects real Gulf export capacity coming back, which erodes Iran's Hormuz leverage. Saudi Arabia resumed loadings at Yanbu, with the East-West Pipeline at 2-2.65m barrels a day and seen by Kpler rising to 3-4m soon. Saudi and UAE shuttle tankers under US escort have restored at least 60% of pre-war flows. The risk: Qatar's mediation is stuck, per Axios, and a squeezed Iran may escalate against ports, refineries, pipelines or Red Sea shipping. x.comÂ
An imminent Israeli strike on Iran puts Gulf oil infrastructure at unusually high risk over the next three months, supporting a near-term rise in crude oil. Large trades are betting on oil reaching $115 again. x.comÂ
Crude oil looks headed lower as tanker traffic through the strait nears pre-war levels and Trump makes cheaper oil a priority. Per CNN via @Osint613, the U.S. moved 40 tankers carrying about 18 million barrels through the strait on Tuesday, a daily record since the war began and only slightly below the pre-war 20 million. Once the Iran saga is over, oil will probably be cheaper than before the war. x.com x.comÂ
Crude oil should fall back into the $60s and likely well below over time once the Iran war is resolved. Middle East producers are overproducing but cannot export the barrels, so when the Strait fully reopens they will flood the market. Oil tried to break down from its trend line but was rejected, and bigger resolution news is likely needed to push it much lower. Cheaper oil would remove current inflation fears, setting up a deflationary boom. x.com x.comÂ
Oil stays above $80 well past the midterms because the supply problem persists despite peace headlines. Ships are still attacked near Saudi Arabia, Yemen and the UAE; a reported US strike on Iran's Konarak Naval Base ended nearly seven weeks without US strikes. There is nobody in Iran who can sign a deal and end the conflict. x.comÂ
Sustained high energy prices strain US farming, logistics, manufacturing and consumers, so crude oil should fall dramatically from its elevated level. Middle East and Russia tensions are lifting WTI, shown near $103, while Trump will likely step in at some point to reduce uncertainty. x.com x.comÂ
Crude oil faces near-term pressure as Trump said US-Iran talks were productive and pledged no strikes before the November 3 elections; Brent fell to $103.36. Supply risks persist, however, with attacks on tankers near the Strait of Hormuz and 1.3 million barrels a day of Gulf of Mexico production shut in ahead of Hurricane Isaias. x.comÂ
Crude oil has room to rise as Trump's war with Iran accelerates and both the Strait of Hormuz and Bab el-Mandeb are closed. The WTI target set at $67.50 was $83-85, with a $91 overshoot; getting and staying above $91 this time would spell deep trouble. Senior US officials say more than 60 refueling aircraft were sent to Israel ahead of Trump's expected escalation. x.comÂ
Crude oil should fall to $60 once the Iran war is over. Oil is at $100 with troops on the ground and the Strait of Hormuz closed, but when the conflict ends rate cuts should follow and the S&P 500, now down 7% this year, should make a stronger comeback. x.comÂ
