05/29/2026
Friday Morning Oil Market Update: Ahead of Today’s EIA Number
Whether you’re Bullish or Bearish, here we are!
The conventional wisdom right now is simple: an Iran deal gets signed, the Strait of Hormuz fully reopens, and oil crashes back to $70, maybe lower if you listen to the doom-and-gloom crowd.
I’m not convinced it’s that simple.
Take a step back and look at what has actually happened to global supply over the last three months. Hormuz disruptions have materially impacted flows. Major Gulf producers have seen meaningful shut-ins and export interruptions. Global inventories have drawn down significantly, and consuming nations have leaned hard on strategic reserves.
In fact, we’ve recently seen another meaningful draw from the Strategic Petroleum Reserve, roughly 9 million barrels underscoring just how aggressively policymakers have leaned on emergency supply to help stabilize markets and pricing.
That doesn’t reverse overnight.
Pipelines and export terminals that have been idled don’t magically restart in a week. Infrastructure damage takes time. Logistics take time. Strategic reserves, once drawn down, take years to rebuild under normal market conditions.
And now we’re firing missiles again!
The market seems to have mostly priced out the “war premium” already. WTI pulled back sharply on deal optimism, only to rebound again as geopolitical tensions resurfaced. We’ve seen that pattern repeatedly.
But here’s the bigger question:
Does a signed agreement erase the supply deficit that has quietly built underneath the headlines?
Even if tensions cool, the regime in Tehran isn’t disappearing. Their economy eventually turns back on, frozen funds get released, and Iranian barrels re-enter a very different global energy market than the one we had in January.
My view? Between now and the midterms, I expect policymakers to do everything possible to keep energy prices contained. Political pressure to bring down oil and gasoline prices will likely be intense.
Post-midterms, however, I think fundamentals start mattering a lot more than headlines.
In my opinion, $100 oil over the next 18–24 months is entirely realistic before we meaningfully revisit $70 crude. Lower inventories, thinner strategic reserves, infrastructure damage, and a reshaped global energy trade picture suggest we may be operating in a very different market than we were just a few months ago.
I’m no savant, despite my Holiday Inn points, but I’ll be watching today’s EIA number closely.
If inventories continue drawing despite all the deal optimism, that tells us something.