Crude oil's last cushion is gone as recovering demand squeezes constrained Middle East supply. Barclays puts China imports near pre-war levels at 10.5m b/d, India up 600,000 b/d year on year and Middle East flows at 84% of pre-war levels; US demand is recovering. After more than 500m barrels of inventory were drawn down, buyers are paying a $13/bbl premium for next-week cargoes over the front-month contract, versus under $4 a week into the war. x.com 

Crude oil's safety buffer is draining at a record pace, so the next supply shock will hit a market with far less protection. The Iran war and near-closure of the Strait of Hormuz have removed over 1 billion barrels of supply, and Morgan Stanley estimates stockpiles fell about 4.8 million barrels a day from March 1 to April 25, a record. A record 400 million barrels of emergency reserves have been pledged, and inventories are near 2018 lows. Even if Hormuz reopens, restocking will add demand. … Show more

Extreme bullishness about an oil shortage is a warning because oil has tended to return to around $50 within 12-18 months after such talk. Calls for a 'great oil repricing' appeared today, though they may not be widespread enough yet to mark the same setup. x.com  x.com 

Crude oil's 4 million-barrel-a-day global inventory draw despite weaker exports and refinery demand signals physical tightness. Chinese exports and refinery demand in Russia and China are each down a few million barrels a day, yet Brent is at a more than four-year high. Bessent says Persian Gulf exports exceed prewar levels, but cash and dated Brent trade well above front-month futures. Rising backwardation and inventory draws leave smaller buffers if escalation continues. x.com  x.com 

Crude oil faces a supply loss no policy tool can offset if the Strait of Hormuz stays closed. The supply destruction is about twice the ~8 mbpd demand drop at peak COVID lockdowns, the largest demand destruction event in history, so even a COVID-style lockdown would not balance the market. The announced 400 MB US SPR release won't be enough either, because what matters is how fast reserves can be drained, about 2 mbpd. x.com 

Crude oil faces a return of the glut. Per @JavierBlas, the IEA's first look at 2027 sees too much oil again by this time next year, as Hormuz is expected to reopen, though the agency warns of higher-than-normal uncertainty in its supply and demand forecasts. x.com 

Crude oil could still see a shock, possibly to $200. Per Tasnim via @HormuzLetter, Iran declared the Strait of Hormuz closed to all vessels, including tankers, in response to US strikes, and said any ship attempting transit will be attacked. @TheShortBear notes the US Strategic Petroleum Reserve holds 349 million barrels and is drawing about 8 million a week, leaving roughly six weeks before the 300 million level widely seen as a panic trigger. x.com  x.com 

Oil faces an explosive move up, likely into the midterms, as the supports holding prices down run out. Satellite images do not show the ships Axios's Barak Ravid claims are transiting Hormuz, and false reports of barrels have kept prices down so far. Most strategic reserve releases by the US and other countries are done and cannot be extended at current levels; when they run out, a big reason prices are contained goes with them. 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 has been suppressed for a long time and may be about to break higher. SPR releases and constant manipulative tweets have held WTI down, leaving Strategic Petroleum Reserve levels depleted. Oil is now driving interest rates tick for tick, which makes it the number one problem. x.com  x.com