The fire in the Strait of Hormuz has finally reached the oil wells🔥

US oil prices extended their reversal, currently falling below $100 per barrel, with only a +9% increase for the day.
We are witnessing one of the largest daily crude oil reversals in history.
The logical chain is very clear:
1️⃣ Throat is locked: Iran controls the Strait of Hormuz, a vital route for one-third of global maritime oil transportation, which is almost paralyzed. Ships can't pass, oil can't come out.
2️⃣ Tanks are filling up, forcing production cuts: Exports drop to zero, crude oil can only be stored in land tanks and offshore oil tankers. Southern Iraq tanks are the first to fill up, with production dropping sharply from 3.3 million barrels/day to 1.3 million barrels/day, a nearly 60% reduction. Kuwait and UAE tanks can only hold for a few days, forcing them to follow suit with cuts. Kuwait initially cut 100,000 barrels/day, and this weekend, the cut will be tripled.
3️⃣ Supply cliff: Iraq has already cut about 1.5 million barrels/day. JPMorgan warns that by the weekend, cuts could surge to 3 million barrels/day, and next week over 4 million barrels/day. This is not an active OPEC+ regulation but a physical capacity freeze.
4️⃣ Oil price valuation: When traders realize this is not a drill but a real supply disruption, oil prices have only one way to go—skyrocketing. Brent crude has broken $100 per barrel, and Goldman Sachs says if the Strait remains closed, surpassing the 2008 peak is also possible.
This is not geopolitical risk premium; this is real supply loss.🚀
#石油 # Geopolitics