Hormuz Reopening Is Not a Stock Rebuild
Friday, September 25 brings another crude-down, gold-up session, but the inventory damage keeps me cautious about the diplomatic optimism. November Brent fell $1.90 to $104.70/bbl while December gold gained $31.50 to $4,329.50/oz. Global observed oil inventories declined 507 million barrels over the first six months of the conflict, averaging 2.8 million b/d. Within that broader draw, China’s above-ground crude tanks lost approximately 68 million barrels. Restoring flows through Hormuz would help meet consumption, but rebuilding inventories requires supply to exceed demand. That distinction matters when August flows through the strait averaged only 7.6 million b/d, still 13.1 million below pre-war levels. I remain dubious about the negotiations and lean toward renewed military escalation in early October. That timing is my working view; sustained shipping accompanied by rising inventories would give me more reason to reconsider than an agreement alone. IEA, September 18.
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