Aramco just revealed the hidden cost of avoiding Hormuz
Saudi Aramco has built an alternative route that bypasses both the Strait of Hormuz and the Red Sea. Oil moves from Yanbu to Ain Sokhna, through the SUMED pipeline, exits via Sidi Kerir, and then sails around the Cape of Good Hope to reach Asia. The catch? That "safer" route now costs about $5 per barrel more once freight, insurance, and pipeline fees are included. On a typical cargo, that's roughly $10 million in additional costs. The impact is now so significant that Aramco is developing a separate pricing formula for these shipments because its standard Asia Official Selling Price (OSP) no longer reflects the true economics. The key takeaway: The market has been treating alternative routes as a free solution. They never were. Those costs are now becoming visible, and they're another reason why the true cost of oil is moving higher, even when headline crude prices don't fully reflect it. Source: Jack Prandelli on X
Oil slides 5% and US stocks indices futures jump as Iran reportedly signals halt to attacks if U.S. pause holds.
Iran has indicated it will stop carrying out attacks as long as the U.S. also refrains from striking, Reuters reported. There is now a 55% chance that the United States 🇺🇸 and Iran 🇮🇷 will sign a ceasefire this month, according to Polymarket traders Source: Evan, CNBC
Brent crude has returned to $100 a barrel after Houthi militants attacked two Saudi tankers in the Red Sea
The attacks have widened the Middle East conflict and increased the risk of further oil supply disruptions. Shipping was already under pressure in the Strait of Hormuz because of renewed tensions between the US and Iran. The Bab el-Mandeb Strait had become an important alternative route, but more vessels are now avoiding it. Oil markets are also facing attacks on the Caspian Pipeline Consortium terminal, which handles most of Kazakhstan’s crude exports. With global inventories already reduced by months of conflict, the risk of a supply squeeze is rising. According to Saxo Bank, oil flows now face two major bottlenecks. This has pushed up the risk premium in crude prices and renewed inflation concerns. Source: zerohedge
Crude Oil only has 43 days of supply left in the U.S., the lowest inventory in 45 years 🚨 🚨
Source: Barchart, BofA
Goldman Sachs models a scenario where the Strait of Hormuz remains disrupted through late 2027.
Under these conditions, they project Brent crude could spike above $120/bbl by Q4 2026, before settling at an average of ~$100/bbl throughout 2027. This contrasts sharply with Goldman's $80 base case, suggesting current prices still assign relatively low odds to a prolonged physical supply disruption Source: GS, TME
BRENT CRUDE OIL JUST JUMPED BACK OVER $90 PER BARREL
Source: Evan @StockMKTNewz Bloomberg
Hedge Funds going long oil at the fastest pace in a decade
Source: Barchart
The EIA just published a warning today that reported Cushing inventory may overstate how many barrels are actually usable as stocks approach tank bottom levels.
This is the exact mechanism from the storage schematic covered in the below post. The suction line near the bottom of a tank means the last portion of reported inventory was never really accessible. If Cushing tightens further, the headline barrel count will look higher than what the market can actually draw on. Watch operationally accessible barrels. Source: Jack Prandelli on X
