Paper market is selling off looking through conflict to resolution, but physical reality is longer timeline - weeks to months for production recovery and shipping normalization.

Production shut-ins across Middle East will take weeks (best case) to months (Iraq, Kuwait). Ships redirected from Strait of Hormuz need confidence to return. Physical market (Brent dated) trading differently than paper market.

Optimistic estimates: 1 month (Saudi Arabia). Worst case: 2-4 months (Kuwait) to 6 months (Iraq). Market using 2 months but that's optimistic. Need to consider 'new normal' with potentially lower throughput.

Continuum of recovery - some barrels return first from Saudi Arabia. Uncertainty about Strait normalization may reduce throughput from previous 20M barrels. Increased freight rates may deter ship owners from risky routes.

US exports can increase from 4M to 5M barrels/day but this 1M increase insufficient to fill gap from Strait disruption. Using all buffers (floating storage, SPR, inventory) but like 'shovel to fill hole dug by excavator'.

US produces 13M barrels/day but export capacity limited by docking/vessel constraints to 5-5.5M. Physical market in Middle East/Asia shows demand destruction from scarcity - gap not being filled fast enough short-term.

Red Sea disruption would be very significant - 5M barrels/day rerouted through Red Sea has been 'huge release valve' preventing $150 crude. Losing that would create 'really different picture' and 'ugly' situation.