Commodity Compass - 5/22 - EIA Proclaims July as Oil's Red Zone

Commodity Compass - 5/29 - A Memorandum of Misunderstanding Defines Energy Markets

This week's defining event arrived not from the strait but from the negotiating table. Reports of a U.S.-Iran memorandum of understanding on a framework for talks set off the mostsignificant single-week oil price decline since this crisis began — WTI broke below one hundred dollars for the first time in weeks and ended the week at $87.76, down more than nine percent. Brent settled at $91.70, down more than eleven percent. The market is pricing in a Hormuz reopening before it has happened. Secretary Rubio played down an imminent deal. President Trump said he would not rush the agreement. The paper price moved on the MOU. The oil in the ground has not moved at all.

Commodity Compass - 5/22 - EIA Proclaims July as Oil's Red Zone

Three supertankers carrying an estimated six million barrels of crude transited the Strait of Hormuz this week — cargos bound for Japan and China, the first to move through the strait since the conflict began. Japan, whose crude imports from the Middle East had fallen to their lowest level on record, is now welcoming its first Gulf cargo since the war started. This is not a reopening. Normal Hormuz traffic moves thirteen-plus million barrels per day. Six million barrels across several days is a trickle — notable for the signal it sends, not for the supply relief it provides.

Commodity Compass - 5/16 - The Move in Bond Yields Brought Volatility to Commodities

Last week on this show, we talked about the divergence — equities at all-time highs while commercial traffic through the Strait of Hormuz had gone to zero. We called it one of the more remarkable macro contradictions in recent commodity history. This week, the underlying tension finally resolved — and it resolved violently.

Commodity Compass - 5/9 - Equity Markets Brush Off Rising Commodity Supply Risks

The Hormuz crisis entered new territory this week. AIS vessel-tracking data from MarineTraffic confirmed what many had feared was approaching: commercial traffic through the Strait of Hormuz has dropped to zero. Not diverted around the Cape of Good Hope. Not delayed. Zero transits in the past twenty-four hours. The strait that normally moves approximately twenty percent of the world’s seaborne oil — along with disproportionately large shares of LNG, petrochemicals, and refined products — has gone completely dark for commercial shipping.

Commodity Compass - 5/1 - Grains Head Higher on Fertilizer Squeeze; UAE Leave OPEC+

This week, one of the most significant institutional developments of the Hormuz crisis arrived not with a missile strike or a diplomatic announcement — but with a formal letter. On April 28th, the United Arab Emirates announced its withdrawal from OPEC and the broader OPEC-plus alliance, effective today, May 1st. The UAE joined the organization in 1967. It has now left. The country produces roughly three and ahalf million barrels per day and represented approximately twelve percent of OPEC’s total output. The stated reason: a sovereign strategic choice to pursue its own production ambitions free of cartel constraints — a tension that hasbeen building for years but was accelerated by the Hormuz crisis and the UAE’s own experience of being attacked by Iran during the conflict. We’ll have more on what this means for oil markets in the energy section.