If Hormuz fully normalizes, Iran's leverage fades
That's why I expect recurring threats, incidents & false crises
Tehran's power comes less from closing the Strait than from convincing everyone it could close tomorrow
Israel remains the wild card
#Hormuz #Iran #OilMarkets #OOTT #Geopolitics
Jared Kushner’s private equity firm, Affinity Partners, is actively seeking to raise $5 billion or more in new funding from Middle Eastern sovereign wealth funds. - New York Times
Interesting US flow dynamics.
PADD 2 is getting sucked dry as Gulf pulls barrels to export. Makes sense considering that PADD 2 has Canadian heavy sour barrels that are in demand right now.
PADD 3 has SPR and enough stockpile to last through June.
But what’s really worth highlighting here is the PADD 2 and 4, landlocked, crude imports are falling. Land imports have dropped to 3.129 million b/d, normally over 3.4 million b/d.
Cushing is already near tank bottom, so the Gulf can no longer pull barrels from inland to export, which means the incoming crude draws will be mostly in PADD 3. Canada doesn’t have enough barrels to export to the US now so flows will remain low.
As PADD 3 crude inventories drop and as SPR flow rate slows, US crude exports will inevitably drop. This will force oversea markets to tighten.
Right now, the market is making the binary assumption that once this MOU is signed, normality is the base case. Can the market overlook tank bottom and see that flows are increasing and prevent an oil price spike?
Sure, anything is possible.
But to assume perfect execution and a smooth transition is wishful thinking considering the adversary here, Iran, knows the same math/logistical timeline as the rest of us.
Balancing on a knife’s edge is probably the best way to describe this situation.
Iran's President, Masoud Pezeshkian, resigns and relinquishes full control to the IRGC. Not a sign that points towards a deal.
https://t.co/BirvqWDTUt
https://t.co/AXdhsiPehX
We are ~9 million bbls away from hitting a storage level that's the equivalent of living paycheck to paycheck for gasoline and distillate.
Once we get there, even a minor disruption (any sort of outage) will result in gasoline lines at gas stations.
I guess we are really doing this.
Australia Energy Minister tries to reassure Australians that fuel supplies including "98.5 per cent of service stations are well stocked with diesel and a higher proportion for petrol".
He also reminded that his petrol, diesel stocks numbers and days on hand "are not the entire amount of fuel in Australia, doesn't count the fuel in people's car, doesn't count the fuel in service stations." Can't recall ever seeing anyone highlight the petrol and diesel that is in cars and trucks.
#oott
Wow, that’s much more runway than I had been expecting.
Iran may not be joining that shut-in club so soon after all.
90 MMbpd spare inventory capacity at 1.75 MMbpd export rate (if fully blocked) is ~51 days of runway.
There is currently ~13 MMbpd of crude, condensate, and NGL production currently shut in across the Gulf.
Iran would—will eventually?—have raised that to ~15 MMbpd.
@CTV_PowerPlay@VassyKapelos@timhodgsonmt Just get oil to ports. And get it done quickly. Increase value and quantity of partners we can do business with. 1 buyer where they hold all the leverage is shit.