Listen to this interview - March 13

[dan_s]

I have a very HIGH level of respect for Robert Rapier. I used to be an EPG member, but I have not heard from him since pre-Pandemic.

https://www.financialsense.com/podcast/21584/robert-rapier-ive-warned-years-were-now-nightmare-scenario

His opening remarks, which I agree with:
> Iran closing the Strait of Hormuz is MUCH DIFFERENT than Russia invading Ukraine. That was a risk to oil supply, this is a REAL and very large actual reduction in supply.
> It is more than a temporary issue.
> SPR releases (that will not begin for weeks and cannot be more than 4 million bpd) cannot keep up with a 15% in the world's oil supply.
> Drones are worse than mines.

Key points:

The "Nuclear Option": Rapier views the closure of the Strait of Hormuz as Iran’s "nuclear option," noting that they control a flow rate of 20 million barrels per day—an amount the world cannot replace.

The $200 Oil Pathway: He argues this is a structural shift rather than a temporary spike, stating that one can now draw a "credible line" to $200 oil because the scenario is no longer just a risk, but a reality.

Strategic Reserve Limitations: He points out that the Strategic Petroleum Reserve (SPR) is half-depleted and fundamentally lacks the flow rate capacity to compensate for the volume lost in the Strait, even for a short period.

Asymmetric Drone Warfare: Rapier believes drone attacks are potentially more dangerous than mines because they target the safety of ship captains and expensive vessels directly, effectively halting traffic through intimidation.

Geographic Advantage: He emphasizes that the geography of the Strait—narrow lanes dipping deep into Iranian territory—gives Iran a massive military advantage that makes naval escorts "too risky."

California’s Most Vulnerable State: He identifies California as an "energy island" and the most exposed state in the US, as it relies heavily on Middle Eastern crude and lacks pipeline connections to the Permian Basin.

[dan_s]

Then read this article on OilPrice.com

The Myth of the Oil Glut Is Dead
By Cyril Widdershoven - Mar 13, 2026, 2:00 PM CDT

The Strait of Hormuz disruption has shattered the long-held belief in a global oil glut, revealing that the market was actually running with very thin spare capacity and fragile supply chains. < I told you so! IEA has been lying about an oil GLUT for over a year.

Even a record 400 million-barrel strategic reserve release failed to push prices down significantly. < Because releases from the SPR won't come close to the loss of over 15 million bpd of oil from the Middle East. Maximum SPR releases, which will not start for at least a month, can only get up to ~4 million bpd.

Years of underinvestment in oil projects, limits to U.S. shale growth, and geopolitical risks mean markets could stay tight. < Even if the bombing stops tomorrow.

Read this carefully: https://oilprice.com/Energy/Crude-Oil/The-Myth-of-the-Oil-Glut-Is-Dead.html

[mikelp]

hey Dan
thanks for sharing those two links
definitely worth listening to Rapier
and read the OilPrice.com article

great info

[mrbill]

Anyone got any super wild guesses, short term an long term, where the Oil Price could be heading?

[Joe]

From a technical analysis perspective, there is a cup and handle on oil from 2015 to today. The inverse handle measured move goes to about ~$205, inverse cup measured move goes to between $240 and $250. The Covid “negative oil” contract from 2020 makes the cup’s measured more subjective to what you believe the real bottom was.

Fibonacci extension from the high of 2022 to the low of 2025 (where I have the handle) show the 2.618 at about ~$245, 1.618 is ~$173.

I’ve had $240 in my head. Wouldn’t be surprised if $173 to $205 range sets resistance in the more near term before $240 has a chance.