Today's optimism is verbal intervention. Nothing has changed - US blockade remains, Iran says straits are 'open' but require compliance with Iranian forces (effectively closed).

Market wants conflict to end, is receptive to positive headlines. Today's move is unwarranted and will reverse unless real breakthrough this weekend.

We still have world's largest oil disruption with blockade on Iran's exports still in place.

3-4 months minimum for oil. Natural gas could be years. Some fields may never recover fully.

Even after physical recovery, security premium will remain because Iran demonstrated ability to strangle Hormuz long-term.

Shortages first in Asia (diesel and jet), similar to COVID pattern spreading from Asia to Europe to US.

Asia too dependent on Hormuz. China/South Korea stopped/slowed exports. Australia having shortages. Desperate Asians pulling barrels from Africa/Atlantic, then coming to Gulf.

Watch product stocks in Europe (ARA) and Gulf Coast for inventory draws. US crude exports near record, will draw down US stocks.

Physical shortage not yet visible in US data but coming.

China doing better - stockpiled 1.2-1.3B barrels crude. Not facing same shortages, even parceling out refined products to other Asian countries.

China not enjoying high prices or loss of discounted Iranian oil, but better positioned.

Europe will have to pay high prices to bid barrels away from Americas or go without. Refining margins negative, refiners reducing runs.

Will lead to extreme price increases, rationing, canceled flights, and market-price induced demand destruction in Europe.