Oil tops $100/bbl as prospects for quick Hormuz reopening dim

Oil has gathered all the catalysts it needs for a perfect storm to propel prices to the next level.

Key takeaways:

• Oil prices hit their highest level since June 2022 despite reports that G7 nations may release strategic petroleum reserves to stabilise the market.
• Shipping activity suggests most shipowners remain reluctant to transit the Strait of Hormuz, with only a handful of vessels entering or leaving the Middle East Gulf in recent days.
• Storage pressure continues to build across Gulf producers, raising the likelihood of further output cuts or well shut-ins as tanker availability remains constrained.
• Alternative export routes are helping but remain insufficient, with record loadings from Fujairah and Yanbu still leaving effective Middle Eastern exports at only about one-third of normal levels.
• Asian refiners are expected to step up purchases of long-haul cargoes from the Atlantic Basin as no quick reopening of Strait of Hormuz traffic appears in sight.

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