Wall Street wants the Iran war to end, but it's also the reason why it isn’t ending: Amos Hochstein

Summary

Amos Hochstein discusses the Iran conflict and Strait of Hormuz, arguing that Wall Street's belief in an imminent deal keeps oil prices artificially low despite tightening fundamentals. He warns that U.S. gasoline inventories are drawing down to a critical point by mid-June, which could shift leverage to Iran and cause oil prices to spike.

• Hochstein says negotiations only cover opening the Strait of Hormuz, not the nuclear issue.
• He believes Iran will control the Strait for the foreseeable future regardless of any deal.
• He notes Wall Street's optimism about a deal has depressed oil prices despite inventory draws.
• U.S. gasoline inventories are already 5% below the five-year average and continuing to draw.
• He predicts a supply cliff by mid-to-late June.
• He puts the probability of a comprehensive deal well below 10%.
• The likeliest outcome is something similar to the JCPOA.