Eric Nuttall

Speaker stated global oil production is down ~11 million barrels per day, with ~900 million barrels lost in Middle Eastern production this year, and if the Strait of Hormuz remains closed, oil prices may need to reach ~$177 per barrel to induce demand destruction. Safety buffers (e.g., unsanctioned Russian/Iranian barrels, SPR releases) are depleting in real time, leading to physical shortages. Even after the strait opens, a permanent political risk premium of $10-$20 per barrel is expected due to heightened geopolitical risks and potential permanent production damage in countries like Iraq and Kuwait. Oil prices are positioned for significant upside in the medium to long term due to sustained supply constraints, inventory draws, and increased risk pricing, warranting a LONG view. The Strait of Hormuz reopens sooner than expected, mitigating supply shocks, or demand destruction occurs at lower price levels than anticipated.