Steven Schork

Schork states that with the current disruption continuing for three more weeks, the path for oil prices is higher towards his "second-tier envelope" of $130-$134 a barrel. He notes strong buying interest from Asia/Europe and that U.S. prices are now catching up to global prices. The closure of the Strait of Hormuz has created a physical supply shortage. The extension of hostilities means this shortage will worsen over the next few weeks, forcing buyers to bid prices higher, especially for available U.S. crude. The fundamental setup of prolonged physical disruption, strong global demand for available barrels, and the widening arbitrage support a bullish, higher-for-longer price outlook. A swift, unexpected diplomatic resolution that reopens the Strait much sooner than anticipated.

US refiners are running at 97-100% capacity with virtually no ability to increase output. Diesel and gasoline forward curves signal a product shortage, keeping refining margins massive. Retail gasoline prices are elevated because of product scarcity, and the industry cannot bring more supply to market to lower prices even if crude oil fluctuates.

Fertilizer prices will increase because natural gas is a key input, and the disruption in natural gas markets will drive up costs for fertilizers, contributing to food inflation.

Refined product inventories for diesel, gasoline, and jet fuel are at red lows, U.S. refiners are already running at max capacity, and seasonal demand is set to pick up, putting upward pressure on product prices.

U.S. refineries are running at near-maximum capacity with very little room to increase gasoline supply, keeping refining margins elevated and oil major profits high; the only way to bring prices down is demand destruction, which supports staying long the majors until that occurs.

U.S. refineries are running at near-maximum capacity with very little room to increase gasoline supply, keeping refining margins elevated and oil major profits high; the only way to bring prices down is demand destruction, which supports staying long the majors until that occurs.

44% of global LNG supply has been sidelined by the conflict and will remain offline for 3-5 years, turning the natural gas market on its head. This supply shock will have severe knock-on effects, driving up fertilizer costs (leading to food inflation) and disrupting helium production, which is critical for AI expansion and chip manufacturing.