The oil market just passed its breaking point.
And it doesn’t matter if the Strait of Hormuz opens tomorrow.
Here’s why the damage is already done 🧵
Even if a ceasefire is signed TODAY:
— Floating tankers need 30–40 days to offload
— VLCCs rerouted to the US need 3+ months to return
— Onshore ME storage needs to drain ~200M bbls first
The supply gap doesn’t care about peace deals
— Floating tankers need 30–40 days to offload
— VLCCs rerouted to the US need 3+ months to return
— Onshore ME storage needs to drain ~200M bbls first
The supply gap doesn’t care about peace deals
Cumulative storage lost from Hormuz closure:
End of April → 1.2 billion bbls
End of May → 1.59 billion bbls
End of June → 1.98 billion bbls
This is 4x larger than any supply outage in history.
There is no playbook for this.
End of April → 1.2 billion bbls
End of May → 1.59 billion bbls
End of June → 1.98 billion bbls
This is 4x larger than any supply outage in history.
There is no playbook for this.
The cycle playing out right now:
↑ Crude prices
→ Compressed refining margins
→ Lower refined product output
→ Product storage draws
→ Higher margins again
→ Higher throughput
→ ↑ Crude prices again
Rinse. Repeat. Until something breaks.
↑ Crude prices
→ Compressed refining margins
→ Lower refined product output
→ Product storage draws
→ Higher margins again
→ Higher throughput
→ ↑ Crude prices again
Rinse. Repeat. Until something breaks.
By end of July, US commercial crude storage could fall below 400M bbls — near operational minimum.
At that point, the Trump administration faces a binary choice:
Ban crude exports. Or watch US refineries shut down.
Neither option is good for markets.
At that point, the Trump administration faces a binary choice:
Ban crude exports. Or watch US refineries shut down.
Neither option is good for markets.
The only thing that “balances” this market now is demand destruction on the scale of COVID lockdowns.
Not lower prices. Not diplomacy.
Government mandates forcing people to use less fuel.
That’s the math. $95/bbl is not the answer.
Not lower prices. Not diplomacy.
Government mandates forcing people to use less fuel.
That’s the math. $95/bbl is not the answer.
The last marginal barrel — the one that keeps a refinery running vs. shutting down —
What does it trade for?
Nobody knows. And that’s the most terrifying thing about this crisis.
What’s your number? 👇
What does it trade for?
Nobody knows. And that’s the most terrifying thing about this crisis.
What’s your number? 👇
Source & credit: @HFI_Research
Full write-up: “The Breaking Point Is Here” — published April 2026.
If you’re not following them, you’re missing the sharpest oil market analysis on this platform
Full write-up: “The Breaking Point Is Here” — published April 2026.
If you’re not following them, you’re missing the sharpest oil market analysis on this platform
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