Strait of Hormuz Closure Masks Underlying Tank Drain Risk

The Strait of Hormuz closure has been in effect for six months now, affecting oil production in the largest oil-producing region on earth.

According to the IEA, OECD commercial inventories have drawn by a mere 50 million barrels, equivalent to approximately twelve hours of global demand, despite the disruption removing more than 1.5 billion barrels that would never reach world markets.

The market has concluded that the worst is behind us, but Goehring & Rozencwajg disagree and believe this optimism is misplaced.