Prices and SPR
Market Overview
Market Overview
Brent rallied hard on 9 Mar morning after an escalatory weekend
FM and well-head shut-ins inside the AG are ramping up — BUT:- Majority related to Hormuz closure, the main bottleneck
- Much of this returns within weeks once SoH re-opens
- Key number to watch: SoH missing flows (minus Iran, minus Yanbu)
Latest statements from the White House on Mar 9 – all gains given back on Brent
- Restricting US exports, intervening in oil futures market, waiving some federal taxes. Lift requirements under the Jones Act
SPR Analysis
SPR total volume is important medium-term — but rate of release is critical now:
- Maximum SPR + commercial draw: ~10 MBD absolute ceiling
- 4–6 MBD SPR release on crude & products + ~4 MBD commercial draw
- At those levels, prices still don't cool
Historically, the most the US ever released: 1.2 MBD (and that was mandated)
Location of release matters: West vs East SPR draw:
- Large US SPR release → bearish for WTI/Brent
- Large gasoil release in Europe → could partially offset AG shortage
Export bans spreading: China already in place. US export ban discussed internally:
- US export ban → major impact on HOGO/TA arb (bearish USGC exports)
Wider markets pricing disaster — political pressure will only rise from here
