BZ1!102.653The crude shortage is easing. Crude shipments through the Strait of Hormuz have recovered to above 80% of pre-war levels. Saudi Arabia is moving more barrels out by taking on the transit risk through Hormuz and transferring cargoes to buyers' vessels off Sohar, Oman. The partial restoration of its East-West pipeline has also revived exports through Yanbu on the Red Sea, bypassing the strait. Refined-product flows continue to lag. Brent remains inside its rising channel.

As I have repeatedly noted, Iran and Iranian-backed military groups have yet to deploy their full capabilities against shipping and oil production facilities. Despite the recovery in crude flows, I doubt Iran will give up its leverage over oil prices. Once prices fall, it will find ways to disrupt shipping or production again.

Trump's TACO talk and fake-news headlines have become noticeably more frequent over the past two weeks. Yet even alongside the announcement of the final SPR release before reserves reach their operating floor, crude's downside has been limited. At its lowest, spot Brent was only about $10 per barrel below the high from two weeks earlier.