Global oil inventories are six weeks from operational minimums
The oil market is underestimating the risk of a supply-driven price spike. Roughly 11 million barrels per day of shut-in production is being offset by higher refinery throughput, SPR releases, and storage drawdowns.
These factors are masking the true extent of the supply shortfall. The apparent shift from a crude shortage to a product shortage is due to higher refinery throughput and other temporary measures.
The situation is being closely watched, particularly in light of the Hormuz situation. If a resolution is delayed, the market may be significantly underpricing the risk of a supply-driven price spike.