It's not that serious. Lighten up already. Oil. Macro. Geopolitics. I don’t have a blog, newsletter or substack.
Joined July 2026
- Tweets588
- Following6
- Followers10.6K
- Likes494
Pinned Tweet
ME supply is recovering, so why aren't oil prices falling?
I assumed folks has an idea of how price discovery works, but I keep seeing the same argument about supply vs price. It doesn't work that simply. Price is not just a function of supply. More supply doesn't automatically mean lower prices, especially not in the middle of a kinetic conflict where the pace and durability of supply recovery remains uncertain.
I am going to try to make this as simple as possible. For those of you who run balances every day, most of this will be old news, apologies in advance. But there seem to be plenty of people genuinely trying to understand why Middle East flows can normalize while oil stays around $100. This is for them.
<Thread>
Honestly never thought I would see this in my time. The region at large is now understanding that they have to solve their own problems, and that has been long overdue.
Many may disagree with me, but, if something comes out of this meeting, these are real political points gained for Iran (if, big if, any resulting "agreement" can actually hold and not be like the MoU).
The Black Sea is now the world’s deadliest shipping route - FT
"More than 570 vessels have been struck in the Black Sea this year, killing at least 40 sailors, according to maritime security company Ambrey and the International Maritime Organization. That compares with 24 confirmed fatalities in the Hormuz."
ft.com/content/8c874f60-0041…
Here's the math on the history:
CENTCOM’s cumulative figures -> implied MBPD exits
Jul 20: 450m bbls -> ~5.6–6.0 MBPD since early May
Sep 19: >1bn bbls-> ~9.0 MBPD
Oct 8: >1.25bn bbls -> ~13.2 MBPD
Oct 25*: >1.5bn bbls -> ~14.7 MBPD
So that puts the last two weeks ~ 14.7 MBPD, directionally consistent with the pick up we saw since Oct 9th/10th (in GoO flows).
*Rounded totals; assumes consistent counting.
One interesting update is the % of safe transit dropping from 97% to 95% in recent communication, which I highlighted for October last week.
"In recent months, over 95% of ships navigating the Strait of Hormuz have sailed through safely despite the IRGC's unwarranted aggression" - Centcom
xitter.cf/LSREnergy/status/21122…
And the lawsuits have begun. Can't wait to see the "witness list".
"Case will test the Baltic Exchange’s decision to keep publishing price estimates for shipping oil through the Strait of Hormuz during the war."
@BurggrabenH
ft.com/content/eedb7159-65df…
Lakshmi Sreekumar retweeted
India is mounting an increasingly costly defence of the rupee, deploying tens of billions of dollars and resorting to extraordinary market interventions to protect a currency that has come under pressure from elevated oil prices and investor outflows.
The central bank since June has already used about $90bn of the more than $140bn it raised from India’s diaspora to prop up the rupee, including through sales to the spot market and currency swaps to absorb surplus liquidity.
Gold had a nice wake up rally in August after my correction warning back in March. Quality gold miners even outperformed this rally and are near ATH.
But u see, the fundamental setup remains unchanged IMHO from March/April. I am long term bullish but don’t like gold here short term (months) due to higher energy prices.
We get higher oil, higher diesel, higher inflation and likely higher US rates in September and thereafter. Book it. That, for one, is not bullish. US gold ETFs become marginal sellers or at least not buyers.
But my key concern remains weaker EM FX in Turkey due to higher energy cost (both crude and natgas) which may force the gov to sell more gold reserves. So that is an obvious risk factor
India is less obvious but matters most. It has a structural problem: it imports nearly all the gold its households buy, and those imports ultimately have to be paid for in foreign currency. Pro Memoria: Indian HH are the 2nd largest gold buyer globally
Gold was 8% of merchandise imports in 2025, making it a meaningful drain on FX when demand surges. With the 2026 oil shock simultaneously increasing India’s dollar requirement for energy imports, Modi wants to reduce another large discretionary source of dollar demand.
So Modi attacked the gold leg. In May the gov raised the gold import duty from 6% to 15%, tightened import rules and licensing, delayed some bullion-import permissions and Modi personally asked Indians to stop buying gold for a year unless necessary.
The World Gold Council explicitly describes these measures as intended to “conserve foreign exchange reserves” amid pressure on INR.
As u know, I follow oil with laser eyes and think we will now enter the end game. Ultimately, the SoH will be solved but the coming months will be testing ones. Make no mistake. This is getting real now, even though most are tired to pay attention.
Message: I don’t think it is the time to get back into gold. The rally is for 2027. My view anyway
Keep an eye on China - it can bite both ways. If they decide to continue to replenish oil stock at these levels, ok, it's certainly not for runs, the rally is leaving a trail of dead bodies already....
OECD Europe still has not fulfilled its Mar 2026 commitments under the IEA (still short ~96 Million BBLs from my calculations). The IEA compelled its members to fulfill these obligations earlier this month. Imagine if they had released all these barrels already.
Protectionist policies are starting to well up globally. It's every guy's barrel for himself. Except of course the US. Let's see what happens over the next 60 days.
Germany Wants to Stop More Oil Refinery Closures as Costs Mount.
"Germany will seek to stem the loss of oil refining capacity, as closures hurt fuel suppliers, consumers, and the chemicals manufacturing sector."-
Economy Minister Katherina Reiche
If only we could go back in history....
fuelseurope.eu/
Not just the US...everyone is now invoking their own version of DPAs 😂
"Chinese oil and gas companies must make every effort to boost their production and supply capacity in the face of a complex and severe international situation"- National Energy Administration.
Everyone preparing for the long road case.
nea.gov.cn/20261023/2c116068…
The UAE-Sinokor shuttle system is how the SoH started to turn into a sieve in the early days of the war.
Bloomberg: "Sinokor, owned by tycoon Ga-Hyun Chung, gained prominence from the early weeks of the Iran war, having amassed a huge tanker fleet in the run up to the conflict through purchases or time charters.
When Hormuz was all but closed off, those tankers were snapped up at exorbitant rates by producers who needed to load oil or risk running out of storage space and then being forced to undertake costly shutdowns."
Nobody seems to appreciate how much of oil price move is driven by demand recovery. And why is it recovering, because governments globally are relaxing restrictions, implementing fuel price hike/tax holidays and fanning the flames of demand.
BESSENT: IRAN'S ECONOMY WILL GO NON-LINEAR AT A POINT
We are interested to know what this "point" is exactly.