MacroVoices #539 Rory Johnston: Hormuz Crisis, is it Really Over?

Summary

Rory Johnston analyzes the Hormuz crisis and oil markets, noting near-record speculative shorts in crude, China's role as a giant swing importer, and the split between weak crude and surging refined product crack spreads. Patrick Ceresna presents a Valero bull call spread to play refining strength. Masel Begnan highlights positioning extremes in copper and the British pound, with copper showing bullish continuation and the pound washed out for a potential squeeze.

• Hormuz flows have surged as floating storage is drained, but sustained loadings require upstream production restarts.
• China's 5 mb/d import cut absorbed most of the Hormuz disruption, enabling SPR drawdowns and preventing a price spike.
• Crude oil is near a bottom with speculator shorts at extremes, creating asymmetric upside potential from a short squeeze.
• Refined product markets (diesel, gasoline) are exceptionally tight with crack spreads near all‑time highs, benefiting refiners like Valero.
• Copper futures are showing a long continuation pattern with bullish momentum and positioning that is not yet crowded.
• The British pound is extremely washed out, with commercials heavily net long and specs heavily net short, creating a potential squeeze setup.
• Broader equity positioning has shifted as S&P 500 shorts have been covered, raising questions about a semiconductor‑led sector rotation into healthcare.