Syz the moment

As highlighted by Anton Likhodedov @ALikhodedov on X: Many people are questioning why Brent futures aren’t higher and pointing out the massive premium of Dubai oil physical versus Brent futures (see post by Joumanna Bercetche on X his morning following her interview with Brent futures probably don’t fully reflect the severity of the current situation, but a few additional points—building on Michael’s chart on the right —are worth considering: 1) Brent reflects forward delivery and location differences. Brent is currently trading the May contract, and in about two weeks the market will roll to June. These contracts represent crude loading in the North Sea, while much of the incremental demand is in Asia. 2) Shipping times significantly affect the landed price. Looking at the Sparta dashboard, voyage times from the North Sea (for example Hound Point for Forties) to key Asian destinations are roughly: India / Singapore / South Korea: ~37–48 days By comparison: Fujairah → India (Sikka): under 3 days Fujairah → Singapore: about 11 days When you factor in these logistics, the difference in arrival times is substantial, which explains a large portion of the price discrepancy. 3) Crude quality also matters. As June Goh from Sparta explains in the article below, Asian refiners are also dealing with crude slate optimization and diversification, which affects pricing dynamics. That said, the gap between landed prices of Atlantic Basin cargoes and Fujairah cargoes has widened significantly. As a result, some Asian refiners are beginning to consider Brent despite the longer shipping time. A notable example: Trafigura sold a cargo of about 700,000 barrels for late-March loading to a Thai refiner. It’s reportedly the first time a Thai company has bought North Sea crude since at least 2019, when Bloomberg began tracking the data.

SPX and oil moving in pretty much perfect inverse tandem. Correlations since March 4th around 96%. Source: TME

Sustained oil supply shocks can risk deeper drawdowns. In prior cases of prolonged supply disruptions, S&P 500 saw above average drawdowns in the following 3 months". Source: Bluekurtic

In 2017, China bought 26% of Iran's oil. Last year? 90%. Every other buyer EU, India, Japan, Korea has been sanctioned out. So when Trump asks China to send warships to reopen the Strait of Hormuz, he’s asking the one country keeping Iran financially alive to help militarily contain it. China funds Iran's war chest, while Iran mines China’s oil supply. This is one of the most tangled relationships in geopolitics, and Beijing has to choose very carefully. Source: Giacomo Prandelli

Note: Figures Rounded. Source: Energy Institute, IEA via VG Global Statistics @Globalstats11

1. Quick de-escalation: Hormuz flows resume quickly; Brent averages ~$80 in March then mid-$70s, while TTF gas falls from ~€50 to high-€30s as inventories cushion short-term disruptions. 2. ~1-month Hormuz disruption: Markets tighten; Brent rises above $100 in March and TTF gas approaches €80, with faster inventory drawdowns and delayed normalization. 3. Extended disruption / infrastructure damage: Severe supply shock; Brent could reach $150+ by 2Q26 and TTF ~€80, creating a crisis similar to the 2022 European gas shock. ➡️ One thing is clear: OVX is not pricing the de-escalation scenario, closing at 121. Source. UBS, TME

Source: Evan @StockMKTNewz Leverage Shares

1 month - ~$105 per barrel 2 months - ~$140 3 months - ~$165 Source: Evan Evan StockMKTNewz Bloomberg Economics