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1.4K posts
Oh, they’re scared
It’s easy to dunk and wonder how / play quarterback. Scott is a badass and will continue to be a badass.
BREAKING: The USS George H.W. Bush has reportedly been spotted today at 23.4968, 61.5699, just 162 km from the USS Abraham Lincoln in the Gulf of Oman. The reported sighting places both U.S. carriers in the same operational area, alongside an oiler and destroyer. Dual-carrier operations this close to Iran signal a severe escalation — naval blockade posture, expanded strike readiness, and another major blow to the diplomatic ceasefire framework.
Am I getting this right? WTI 3-2-1 crack spread doesnt make sense. Either it’s too expensive or WTI is too cheap. China could start exporting to capture more of the spread. If China does this, they need to start up their crude purchases ahead of time, thus helping drive oil $ up
Day 10: When will oil supply chain will normalize if oil starts flowing again from the Straits of Hormuz? Hint: Not anytime soon 1⃣Let's say the oil flows again from the Straits of Hormuz (which has not and does not seem to be easy to restart). Existing ships will start to load their cargoes from the various terminals in the Gulf. Who gets prioritized first will be a scramble. 2⃣Then all the loading programmes have to be rescheduled. 1 VLCC doesn't just load from a single loadport. It is usually 2 to 3 loadports to fill up the full 2 mb. So another logistics nightmare to deal with at each loadport. 5⃣Although there is production shut in, the onshore tanks are full, so most of the first say 5-7 days of loadings should not have any issue to load. It will highly depend on the timeline of restarting the oil production which could be at least days. 4⃣Meanwhile refineries will need to wait for a better picture of their crude arrival programme to decide what to do and when to start up if they had shutdown already. The first VLCC that arrives is not enough to sustain a feasible run IF they have already shutdown. Read my thread on why refineries simply cannot have a start-stop operation. My view is that refiners will continue to run at low intakes until the crude supply chain looks reliable again (i.e. no more attacks). 5⃣Resupply of crude from other regions into Asia will take between 25 to 50 days. Even then these crudes do not really fit the crude yield and quality requirements of a base AG crude so there will be refineries that will remain down. Also the freight econs need to work - many end users are paralyzed right now on what to buy due to skyhigh freight rates. 6⃣After refineries have achieved a steady state, then only the steam crackers get a fighting chance to resume operations as well. Asia is a nett importer of naphtha and must also see the consistent flow of cargoes heading here before the downstream petchem can run up. My guesstimate of any semblance of a return to a normal supply chain from the onset of point 1 is optimistically 2 months and for petchem, minimum 2.5 months. In summary: 10 days of Straits of Hormuz disruption = at least 60 days of pain to the energy flow in Asia. And I am being optimistic here. #oott