Hooman
Engineer
Crude oil faces a new risk the market has not priced: the IRGC has shown it can close the Strait of Hormuz at will, something it never did in the past 47 years. Saudi, Kuwaiti and UAE tankers are now treated as enemies, and only friendly tankers pass, by advance application and under IRGC escort. A WSJ report, via @KobeissiLetter, that Trump may end the war with Hormuz still closed would confirm the IRGC toll booth is there to stay, so oil should rip. Above $150, it becomes everyone's problem. x.com x.com x.com x.com x.com x.com 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
Yemeni attacks on Riyadh add to the geopolitical risk behind crude oil's rise. Oil is starting to go parabolic. x.comÂ
Crude oil should go lower as Houthi leaders in Yemen declare a maritime embargo. x.comÂ
Oil transport and refining face renewed disruption risk, making crude oil look ready for another leg up. The Hormuz Letter relays an Iranian announcement that a tanker hit a naval mine while leaving the Strait of Hormuz; @news_9x says Ukraine vowed to destroy all Russian refineries. AP reports an official said a missile struck a passenger terminal in Riyadh. x.comÂ
Crude oil should reprice higher because the Iran conflict looks like a multi-year regime, not a short event, and no model carries a 2029 duration. The WSJ reported Vance and Rubio privately warned Trump it could last through his presidency, while the White House floats the biggest naval blockade in history. August PPI rose 5.4% year on year, above estimates, before any blockade effect. Houthis took Mocha and are moving on Bab al-Mandeb, with Brent above $100; $120 talk is the early repricing. … Show more
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
All three routes for Middle East oil out of the war zone shut within 72 hours, and the Fed cannot fix that. Strait of Hormuz traffic fell from over 130 ships a day before the war to 31, then zero. Iraqi drones hit pump stations on the Saudi East-West pipeline, leaving Riyadh five to seven days of crude stored at its end. In the Red Sea, a militia seized Mokha, Perim and the Hanish Islands and bars Saudi ships. Iran only needs to wait: America votes in 49 days, Iran not until 2028. x.com x.com … Show more
Daily attacks on Saudi energy installations, seemingly at will, are a bigger driver of oil's rise than Hormuz. If they escalate and meaningfully damage Saudi production, $200 oil isn't impossible. x.comÂ
Crude oil's geopolitical risk premium is bleeding out as Saudi Arabia's East-West Pipeline reopens. Piping crude straight to the Red Sea bypasses the Strait of Hormuz and vulnerable Gulf shipping lanes, removing a major supply bottleneck. That recovery erases the premium added after the September 10 attacks and stabilizes energy flows when macro markets needed it most. x.comÂ
The Strait of Hormuz situation looks bad for oil supply, because Iran has the leverage to keep control of it and collect tolls. Iranian drones have changed the equation despite substantial US air and naval power, there has been no uprising, and any ground invasion would take very long. Saudi Arabia and Qatar lack the naval muscle and rely on the US, and new pipelines take years, so affected countries will have to play ball for at least a few years. x.com x.com x.com x.com x.comÂ