Geopolitical War Premium

The de facto closure of the Strait of Hormuz has already resulted in production shut-ins totaling over 7 million barrels per day. Traders are pricing in a severe supply deficit for the second quarter as the diplomatic deadlock persists.

Inventory Squeeze

Global oil inventories are changing at -0.3 million barrels per day. Even with record U.S. output, the absence of Persian Gulf barrels is draining commercial stockpiles to five-year lows.