Thread by @KobeissiLetter

Global oil markets are out of control:

As the Iran War closes week 3, US oil prices are trading at $97/barrel, up +76% since December.

Meanwhile, physical oil prices in Oman are up to a RECORD $167/barrel, a +72% PREMIUM.

What is happening? Let us explain.

(a thread)

This chart compares Brent (global oil) to WTI Crude (US oil).

When the Iran War began on February 28th, US oil prices surged toward $120/barrel while Brent lagged, trading at a ~20% discount to WTI Crude.

However, just two weeks later, and Brent hit a +15% premium to US oil.

In fact, Brent's premium over WTI Crude is trading at its widest margin in 11+ years.

And, it gets worse. Oman's oil prices are at $167, Dubai's at $137, and Brent at $113, while WTI Crude sits at $97, per Zerohedge.

Never have we seen such a massive divergence, but why?

When the war first began, US oil prices surged in the wake of uncertainty.

However, as the Strait of Hormuz closed, markets began reassessing risks.

While the Strait of Hormuz is closed, ~18% of global crude oil supply is offline.

But, the US is somewhat "shielded" for now.

US dependence on Persian Gulf oil has almost never been lower:

US imports of crude oil from the Persian Gulf countries are down to ~500,000 barrels per day, near the lowest on record.

Just 9 years ago, the US was receiving ~2.0 million barrels per day from the region.

Meanwhile, US crude oil production stands at ~13.7 million barrels a day near an all-time high.

US production is up +145% since 2003.

In 2006, the US was net IMPORTING ~400 million barrels of oil per quarter.

In 2025, the US net EXPORTED ~100 million barrels per quarter.

Yesterday, the energy crisis accelerated after Israel struck Iran's largest gas facility, the South Pars gas field.

This was followed by Iranian strikes on Qatar's Ras Laffan gas facility, which accounts for ~20% of global LNG supply.

Today, European natural gas surged +30%.

The question becomes, how long can the US maintain this "discount" in natural gas prices?

Last week, the US announced it is releasing 172 million barrels of supply from the Strategic Reserve.

IEA countries did the same, with total reserves releases of 400 million barrels.

Now, US oil reserves are set to decline ~41% to their lowest since the 1980s.

This will drop US oil reserves to just ~34% of total capacity, leaving little room for further releases.

If the Iran War drags on, the gap between WTI Crude, Brent, and Asian oil prices will narrow.

Meanwhile, inflation expectations are surging in the EU and US.

The EU is now expecting 2 interest rate HIKES in 2026 and US rate cuts have been entirely priced-out.

Our models suggest US inflation will near 3.2% if current prices are sustained for another 2 months.

There has arguably never been a market with more disruption than now.

For investors, this means more opportunity to trade volatility.

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Lastly, we conclude with this chart summarizing our inflation models.

If US oil prices simply rise to where Brent is now for 3 months, we see US CPI inflation at 3.5%.

The global economy is rapidly evolving.

Follow us @KobeissiLetter for real time analysis as this develops.