Oil Price Analysis: Brent Breaks Above $110 as the Gulf’s Old Order Cracks
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Key Points:
- Thirty ships transited May 14 after Iran cleared them directly, bypassing US mediation. Tehran demonstrated it can selectively reopen the Strait while maintaining strategic control.
- China refused to curtail Iranian oil purchases despite Trump's direct request.
- UAE, Iraq, and Pakistan are building alternative infrastructure and bilateral deals independent of Washington.
- Despite 30 ships transiting Hormuz, Brent finished up 0.8% as traders recognize 13.8 mbpd shut-in and 1+ billion barrels of cumulative losses remain.
It is approx 76 days since Israel bombed Iran, thus initiating joint strategic preemptive strikes by Israel and The US. In that time, we have seen 13.8mbpd of oil production shut in, export losses exceed 13.8mbpd, with cumulative supply losses of 360 mb in March, 440mb for April and 195mb in May so far. Total 995mb lost in 2.5months. 1 Billion gone and The US PPI came in during the week at 6% YOY, with Euro Zone inflation high at 3% and set to move higher. The medium term effects are now here.