I will probably get a lot of hate for this article title, but I don’t care what you think. I will tell it like it is, and there’s no basis in reality in the oil market today.
None. Zero.
The events that unfolded over the past week would have sent a normal oil market into the stratosphere. If you had told any oil trader on January 1, 2026, that:
2 VLCCs were attacked while transiting the Strait of Hormuz (Oman lane).
~7.5 million b/d of crude oil production was shut-in in the Middle East.
US and Iran were actively bombing each other.
And the Strait of Hormuz is closed.
But you stipulated that Brent would be trading at $85/bbl and WTI would be trading below $80/bbl; they would’ve crucified you.
No one would have believed you. No one.
Yet, here we are. The oil market is still treating the latest conflict as some transitory event that will go away with time. Some in the market have pointed out that the GCC producers are still offering barrels despite the closed Strait, never mind the fact that you actually need the tankers to come out without being bombed.
We are so far detached from reality that it is hard to explain with words. I’ve been at a loss for words for weeks now, reading sellside reports about how the Strait of Hormuz will return to normal by the end of July. Well, we are two weeks away now. Does it look like things are going back to normal?
So it’s no surprise to read another Goldman report out today, noting that the physical oil market has tightened again due to a lack of barrel flow through the Oman lane.
I mean, we all realize that the barrels flowing out were stranded floating storage, right?
Right?
I want to make a meme out of this, but I just don’t even have the energy to do that. We are so far past logic that I wish I could just awaken from this nightmare. Words cannot describe how asinine this market is.