flipper

@GrogKing1 @HFI_Research yeah, Iranians are master traders and negotiators. it's in their interest to keep up the appearance that they are accommodative of the negotiations and buy time.

People saying a month are delusional. Maybe we get some redirection of tankers from other places but it’s gonna take time and $ and that’s not even getting into the next part of it are we gonna see tankers that have been repositioned re-join their previous routes immediately? The answer is a big no so you have that to take into account. Disruption will last well into next year. Especially if we don’t get a deal in the next couple of weeks which imo for Iran the longer this drags out the more leverage they have (whose depends on your POV).

In my view, this is the biggest misconception in the oil market today. Generalists are looking at it from Strait of Hormuz traffic flow while oil specialists are looking at production shut-in. Generalists are saying, “Well, if there’s a peace agreement or tanker starts to come back, everything will be fine.” Oil specialists are saying, “No, shut-in barrels are barrels that will be replaced via lower storage volumes elsewhere. Tanker availability delays production shut-in returning by 1-2 months. Total barrels lost = 1+ billion bbls.” I don’t think it’s anything more complicated than that. So the only way to change sentiment is for widespread fuel outages.

@HFI_Research re russian oil: it's pretty opaque but rystad russian guys who were historically on the optimistic side now expect like 0.5 shut ins soon and maybe up to 1 mln during the year. not everyone still agrees...

@FlipperMsc You clearly know your shit. Thanks for replying. I will also look deeper into the Russian oil situation you brought up about the "shit-ins".

@HFI_Research thanks i appreciate all the free content and discussion your are putting in here. maybe i need to subscribe... keep up the good work.

@OilBal_TWIO @HFI_Research i have a friend who runs a billion+ with relatively flexible mandate. he can't go long oil in size and is cursing daily that being em specialist he understands oil much better than most. it'a a perception game.

@OilBal_TWIO @HFI_Research i agree but it is too far in the future. your average generalist pm has at most a quarter of horizon and most are way shorter. and the vast majority of big money guys cann't really trade oil in size or bother to understand it.

the inventory models to price generally dont work. you current wti-against us stocks regression will show something like 65. going back to normal means normal flows. people don't understand strategic restocking etc. it's too far in the future and too uncertain so the market i s not pricing it. i am bullish myself but it's a classic short run vs long run thing.

@FlipperMsc @HFI_Research aaronkildow.substack.com/p/the-real-pro… What will get back to normal?

@OilCfd Paying record prices and cutting runs. What can possibly go wrong :)

Have fun paying Dated +20 reuters.com/business/energ…

@HFI_Research So that's why the market discounts forward impact of distruptions heavily. The crazy thing is that the market is paying little attention to duration already passed so far. You would expect the baseline for price to reset a bit higher each day the straight is closed.

@HFI_Research Yeah, but here the trick is in duration. Normally you have at least 6 month for supply response from shale. Here everyone understands that once agreement is reached it will get back to normal in about a month. (which is probably wrong, but the conventional thinking is this)

@HFI_Research He is wrong about the math of convergence though see my comment in his feed. Ice Brent index does not converge to dated it has more duration so of current flat price and curve shape stay it will be at substantial discount to dated. (~122 vs ~ 133).

Beautifully done. 👏

@CRUDEOIL231 This assuming both flat price and the shape of the curve stay exactly the same. Also ICE Brent index is an average of 6? points during the day so if vol is high like it is now it may differ by several dollars one way or another.

@CRUDEOIL231 I think you are wrong in convergence assessment. Ice Brent index has another essentially date tenor of duration. So if today's Dates (132.74) holds the ice index will converge to something closer to 122. Which is still substantial carry of more than $1 dollar per day.

What is the North Sea physic mkt, and how should the gap between the paper and physical markets be resolved? Every time I post about the physical market, I see a lot of complaints about why oil prices aren't rising further. Many ppl even criticize me, claiming I’m not explaining things properly. First, I’ll summarize the basic components of the North Sea market. ICE Brent Futures: A financially settled paper contract used primarily for broad directional hedging and speculation without the intention of physical delivery. EFP (Exchange of Futures for Physical): A swap that acts as a bridge, allowing a trader to convert a paper futures position into a physical cargo contract. Forward Brent: A standardized OTC physical swap for future delivery. It represents actual oil but remains non-dated bc the exact loading schedule is not yet determined. Dated Brent: The global benchmark price for physical crude. It is assessed daily by agencies like Platts based on actual trades of the most competitive grade within the BFOET+WTI basket, triggered once specific loading dates are confirmed (typically 10-30 days prior). CFD: A short-term swap representing the price difference between Forward Brent and Dated Brent. It is used to plot the physical forward curve and assess whether the market is in contango or backwardation. DFL (Dated to Frontline): A swap that links the physical Dated Brent assessment directly to the front-month ICE Futures contract, managing exposure between the physical and financial markets. Diff (Grade Basis): The premium or discount applied to a specific physical cargo relative to the Dated Brent benchmark. Driven by crude quality, logistics, and refinery demand, this unhedgeable spread is where physical traders generate profit. This alone should be enough. From there, I’ll explain how the gap between the paper market and the physical market actually closes. A massive divergence between Dated Brent (physic) and ICE Brent futures (paper) typically indicates acute near-term physical tightness relative to forward expectations. If Dated Brent remains at $120-130/bbl leading into the expiration of the front-month ICE Brent futures contract (currently around $100/bbl), the futures contract must converge toward the physical price. The convergence is not optional; it is mathematically enforced by the exchange's settlement rules and market arbitrage. This operates through three primary mechanisms: 1) Cash Settlement via the ICE Brent Index ICE Brent futures are cash-settled upon expiration and do not involve physical delivery. Expiring contracts are settled against the ICE Brent Index. The Index is a calculated average of trading activity in the relevant physical Forward BFOET(Brent, Forties, Oseberg, Ekofisk, Troll)+WTI Midland market during the final trading days of the futures contract. Bc Forward Brent and Dated Brent are intrinsically linked, a physical market sustaining $130 will generate an ICE Brent Index near $130. Consequently, any futures positions left open at expiration are forcibly settled at this higher Index price. 2) The Arbitrage Channel (EFP Mechanism) If a $30 spread exists between paper and physical markets, traders will immediately exploit the arbitrage using the EFP mechanism. Traders buy the undervalued ICE Brent futures at $100 and simultaneously sells a physical Forward Brent cargo at $130. They execute an EFP to swap their long paper futures position into a long physical Forward position. The newly acquired long physical position cancels out their short physical position, locking in a profit (minus the EFP swap cost). To execute this arbs on a large scale, traders must aggressively buy ICE futures. This massive purchasing volume forces the futures price up until the gap closes and the arb window is eliminated. 3) Forced Short Covering Market participants holding short positions in the ICE Brent futures market face extreme risk if the physical market disconnects to the upside. Knowing the contract is destined to cash-settle against a $130 physical Index, paper shorts cannot afford to hold their $100 positions into expiration. They are forced to buy back their futures contracts to close their positions before the expiry date. This forced buying—often resulting in a short squeeze—accelerates the upward momentum of the ICE futures price, driving it into alignment with the physical market. Through the combination of final index settlement and active EFP arbs, the paper market is structurally tethered to physical reality as expiration approaches. #oott #iran

@HFI_Research Shut ins lol

@HFI_Research Ya all sleeping on Russian situation. Due to Ukrainian attacks the shit ins will be around 0.5 mln barrels per day in April. And could reach 1 mln barrels per day later this year of current situation persists.

It's been a week since the ceasefire. We have drained ~10 million bbls of floating storage. We had 3-4 empty tankers go in. Production shut-in of 11 to 13 million b/d continues. Supplies lost due to shut-in = 77 to 91 million bbls.

@FahreedBalsara @nntaleb @JavierBlas Not really

@nntaleb He @JavierBlas is good when it comes to energy and commodities.

This imbecile is a Bloomberg journalist.

@Punishednipman @GoreTiger64th @schrondonowitz After Tokugawa ofcourse.

@Punishednipman @GoreTiger64th @schrondonowitz Bushido was an inspirational thing and a sort of propaganda to brainwash new samurai. In this regard it worked exceptionally well. Segunate held to power for a long time and even after that it produced this sort of military society which punched way above it's economic weight.

no they're not, cow boys were litteraly farmboys who romed a wild and untamed country to do shitty jobs to survive another day, they were very individualistic and not very well regarded by the folks arround them at the time, wile samurais were a supperior class of individual compared to the commoners japanese and theyr entire purpose was to serve they're lords interest, mostly on military related matter but not entirely, wich means they were litteraly like european knignts, this part was so crucial that not having a lord to serve would make them a ronin wich were frowned upon and arguably much closer to the image of the cowboy, they did both were realy cool figures to modern eyes tho

@Punishednipman @GoreTiger64th @schrondonowitz Bushido was codied by Tokugawa himself as a part of a complain to end civil war and cement his power. It and other measures worked quite well for 250+ years.

@GoreTiger64th @schrondonowitz "Bushido" was made up during the military dictatorship of ww2 era Japan to indoctrinate the people into living and dying for the emperor real samurai were willing to turn on their lord's for betterment at the turn of a coin

Mosaic's paradox: why a fertilizer crisis Is crushing a fertilizer stock. $MOS Mosaic, one of the world's largest fertilizer producers, is down 20% in a week. The stock is trading near 6-year lows. The key nuance: The Strait of Hormuz blockade lifts fertilizer prices, but it simultaneously blows up Mosaic's input costs. Sulfur is the hidden bottleneck. Producing phosphate fertilizers (DAP/MAP) requires massive amounts of sulfuric acid. And 44% of the world's seaborne sulfur exports flow through the Strait of Hormuz. With the strait shut, sulfur prices have spiked even harder than fertilizer prices themselves. As a result, investment bank analysts have done the opposite of what you'd expect - they lowered Mosaic's 2026 EBITDA estimates.