Tom Kloza

US refiners are the best place to park investment money because refining margins are at historic highs, global refining capacity is severely constrained, and upcoming earnings will be spectacular, making them the prime beneficiary of the product tightness.

If the Strait of Hormuz remains closed, oil and gasoline prices will rise significantly because reopening the Strait is the only major lever to reduce prices. Gasoline could reach $5 per gallon or higher this summer, and crude oil currently around $100 per barrel is predicated on a June reopening that may not happen.

If the Strait of Hormuz remains closed, oil and gasoline prices will rise significantly because reopening the Strait is the only major lever to reduce prices. Gasoline could reach $5 per gallon or higher this summer, and crude oil currently around $100 per barrel is predicated on a June reopening that may not happen.

Tom Kloza states the Strait of Hormuz closure has caused an unprecedented loss of ~500M barrels of supply. He argues if the Strait remains "impeded" in April, crude prices could spike to $130-$140/bbl or even parabolic levels of $200-$240/bbl. He also highlights critical tightness in U.S. gasoline supply on the East Coast. The prolonged blockage of a critical chokepoint for global oil shipments creates a massive physical supply deficit. This deficit is not easily replaced, leading to sharply higher prices. Higher refined product prices will curb consumer demand and act as a tax on the economy. SHORT on the broad energy minerals sector because extreme price spikes will lead to demand destruction, economic pain, and potential policy interventions (like a federal gas tax holiday), which are ultimately negative for the stability and long-term demand of the sector. A swift diplomatic resolution and full reopening of the Strait of Hormuz would alleviate the physical supply crunch and likely cause prices to retreat.