Bob Elliott
· Nonconsensus
· June 09, 2026 at 10:40
| Read on Substack ↗
Summary
The article argues that the market is underestimating the severity of the oil supply disruption from the Iran War. Despite a temporary improvement in supply, inventories are depleting at an accelerating pace, which could trigger a far more severe squeeze in the coming months. This means inflation expectations may be too low, and energy prices could spike significantly, posing a risk to dovish central bank bets.
•Consensus views the oil shock as manageable, but the author warns that inventory drawdowns are accelerating and risk a significant squeeze within months.
•Inflation is expected to print above 4% tomorrow, indicating immediate price pressures from the war.
•The article references dismissed worries about $200/bbl oil, suggesting the market may be too complacent.
•The pace of inventory drawdowns is the key metric the author focuses on, rather than the temporary supply squeeze improvements.