Rory Johnston
@roryjohnston
oil market researcher founder of former bank economist markets, code, barbecue
As expected, the initial surge of post-MOU inbound ballast (i.e., empty) tankers through Hormuz has entirely faded and the lack of ballast tanker capacity is now again the primary impediment to a recovery in fresh Gulf oil loadings.
The confirmed volume of oil flowing through the Bab el-Mandeb Strait has fallen by ~40% since the Houthis announced their naval blockade of Saudi shipping Russian flows holding pretty firm, while Saudi flows are functionally back to prewar (pre-East-West pipeline reroute) levels
Hormuz oil flow begins to rise again. Still well off the ~15 MMbpd late-June high, but back up to just less than 5 MMbpd (10dma) at latest count. As expected, much of that is the return of the Gulf of Oman ship-to-ship dark shuttle trade, which may soon exceed pre-MOU pace.
🇨🇳👨🔬 Some Chinese petrochemical output indicators to kick off the weekend. Biggest decline in primary plastics (i.e., precursors), actual products far less so, and ethylene bucking the trend higher (naphtha feed displacement via imported ethane?)
What’s that called when you keep doing the same thing over and over again and expecting different results?
🛢️ OIL CONTEXT WEEKLY 🛢️ Crude markets eased amidst a tentative pause in US-Iran fighting before tightening anew as strikes reignited and spread to critical Saudi oil facilities and as far west as Egypt. Summary below, full report in reply.
10-day average Hormuz-exiting oil flow has fallen below 3 MMbpd. That's down ~80% from late June's peak of more than 15 MMbpd. Feels silly to say five months into this, but that's not enough oil.
US commercial petroleum stocks fell by 3.7 MMbbl last week, with product builds (especially propane) offsetting a larger 7.2 MMbbl draw in commercial crude stocks. Total crude stocks stocks fell by 11 MMbbl including a 3.8 MMbbl SPR draw. Crude and gasoline precariously low.
🛢️ OIL CONTEXT WEEKLY 🛢️ Crude prices continue to spiral upward, temporarily breaking back above $100/bbl as the Iran War escalated and the Houthis more directly joined the conflict with a “maritime blockade” on Saudi Arabia. Summary below, link to full report in reply.
🛢️ OIL CONTEXT WEEKLY 🛢️ 🚀 Hormuz flows and Gulf loadings have definitively rolled over amidst mounting Middle Eastern attacks while the oil complex rerated sharply higher across flat crude prices, term structure, and refined product cracks Summary below, full report in reply.
🎙️ NEW PODCAST 🎧 On the latest episode of Oil Ground Up I was joined by the one and only Jeff Currie for a wide ranging conversation about the theory and reality of crude price discovery running into the shock case study of the Hormuz Crisis. [links below]
🛢️ OIL CONTEXT WEEKLY🛢️ Crude prices jump, see largest weekly gain since mid-May as Iran’s attempt to control Hormuz shipping flows prompted another round of skirmishes that threatened a broader collapse of the MOU ceasefire Summary below, full report in reply.
things are quickly devolving again in the Middle East and I'm worried this is really going to tarnish the the diplomatic brand of Versailles
Amidst fresh ship strikes by Iran, Hormuz shipping flows have moderated slightly and shifted sharply back toward the northern Iranian route from the southern Omani one.
🛢️ OIL CONTEXT WEEKLY 🛢️ Crude prices were effectively flat this week amidst a comparatively-quiet stretch of summer headlines, with all eyes on the optimistic-but-lurching resumption of Middle Eastern shipping activity. Summary below, full report in reply.
🛢️ OIL CONTEXT WEEKLY 🛢️ 💀 Crude fell another $8.50/bbl and Brent slipped into prompt contango for the first since February as the surge of exiting Hormuz barrels hit a still weak Asian import market with China on the sidelines. Summary below, link in reply.
🛢️ OIL & IRAN WAR CONTEXT WEEKLY 🛢️ Crude plunged and curves flirted with prompt contango on the back of massive speculative short-selling following the announcement and signing of the US-Iran MOU to end the Iran War and reopen Hormuz. Summary below, full report in reply.
🛢️ OIL & IRAN WAR CONTEXT WEEKLY 🛢️ Crude prices sank to the lowest weekly close since February on the back of a whiplash shift from missiles flying across the Gulf to what most parties are now presenting as an imminent MOU-signing. Summary below, link in reply.
🛢️ OIL & IRAN WAR CONTEXT WEEKLY 🛢️ 📈📉 Crude prices rose through Wednesday before pulling back to end the week only modestly higher; all’s quiet on the US-Iran negotiation front, and all eyes on China’s plunging crude imports. Summary below, full report in reply.
Japanese crude oil inventory chart is one of the wildest through the Hormuz crisis thus far.
Hope (THE GOAT!) DONALD J. TRUMP will play some of his greatest hits, like “I think the war is very complete, pretty much" "We'll be leaving very soon" or, my favourite "I will be meeting now, in the Situation Room, to make a final determination."
🛢️ OIL & IRAN WAR CONTEXT WEEKLY 🛢️ 📉😱 Crude prices crater on further—though, as always, unrealized—US-Iran deal optimism and close out largest monthly decline since 2020; more diplomacy needed before physical Hormuz unwinding can begin Summary below, full report in reply
🛢️ OIL & IRAN WAR CONTEXT WEEKLY 🛢️ Crude prices sink once more on renewed Iran War negotiation optimism, though major diplomatic hurdles remain and the oil market continues to hemorrhage supply. Summary below, full report in reply.
Reuters: "Full oil flows through the Strait of Hormuz will not return before the first or second quarter of 2027, even if the Middle East conflict ended now, the head of the United Arab Emirates' state oil firm ADNOC said"
A brief [updated] history of presidential oil market jawbones through the Hormuz crisis.
Iran latest peace proposal—little changed from proposal Trump called "garbage": 1. US ends the blockade 2. US lifts all sanctions 3. US releases all frozen funds 4. End the hostilities on all fronts (inc Lebanon) 5. US withdraws all military forces near Iran 6. Iran gets paid war reparations
🛢️ OIL & IRAN WAR CONTEXT WEEKLY 🛢️ 📈 Crude prices rise back toward $110 and term structure firms again as US-Iran talks stall out and Trump’s trip to China fails to yield any meaningful breakthrough. Summary below, full report in reply.