Sandman
Stock Trader
Crude oil is holding in the $80s, not the predicted $150, because enough oil still passes through the Strait of Hormuz despite its closure. Iran is badly degraded as a threat and buckling under the US blockade, and Venezuelan oil will also help. Against @zerohedge's line that the war hawks' predictions have aged badly, the $150 oil call is the bad prediction, and the US will prevail. x.com
Yemeni attacks on Riyadh add to the geopolitical risk behind crude oil's rise. Oil is starting to go parabolic. x.com
Crude oil faces a structural repricing of energy risk, not a one-week spike, as both Saudi export routes are compromised at once. Drone strikes took out Petroline, the Hormuz bypass pipeline moving about 4 million barrels a day, while the Houthis seized Perim Island in the Bab el-Mandeb strait and Saudi output sits at a 30-year low. Brent rose 8.7% to $104.61 as the Fed hiked into it. Barrels stuck behind a strait are worth zero, favoring producers that avoid chokepoints. x.com
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.com
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.com
Oil could perk up some from here on Strait of Hormuz tensions, but the tail risk of a giant spike looks low. Both sides want to avoid a full restart of the war, and Saudi and UAE pipelines are moving a lot of oil. @FahadHandle remains concerned that shipping volume is still well below average and that a lasting closure would eventually force countries off strategic reserves into export bans and rationing. x.com
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.com
Oil should already be near $120 because Saudi Arabia, Europe's major oil source, is going offline for an indefinite period. Houthi strikes have repeatedly hit Aramco's facilities at Yanbu, per a report, and it is naive to think Saudi can repair the damage without being attacked again. x.com
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.com
Crude oil was never headed to $200 because Trump and Treasury Secretary Bessent will do whatever it takes to contain it, though their main tool is running low. Markets rank AI and the Fed above the Iran conflict, which would only hurt them through sustained oil above $100-$110 or new highs. Strategic Petroleum Reserve releases have engineered calm, but the SPR is getting dangerously low and the buffer shrinks each week the Strait of Hormuz stays closed. x.com x.com
Crude oil is going through a real-time supply-chain repricing, not just a headline scare. Crossings are at zero, Brent is at $100, Aramco is rerouting to Sidi Kerir, and diversions around the Cape of Good Hope add weeks to delivery. x.com