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Qasem Al-Ali@AlaliQasem · Apr 20, 2026

The oil market just passed its breaking point. And it doesn’t matter if the Strait of Hormuz opens tomorrow. Here’s…

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Summary

The oil market has reached a critical breaking point due to Strait of Hormuz closure, with cumulative storage losses of nearly 2 billion barrels by June that far exceed historical precedent. Even if a ceasefire occurs immediately, the logistics of offloading floating tankers and rerouting vessels will take months to resolve, creating an unprecedented supply crisis that could force the US to ban crude exports or face refinery shutdowns. The only solution is demand destruction on the scale of COVID lockdowns, as the market searches for an unknowable marginal price that prevents complete collapse.

Summarized by ThreadOut AI from the full thread. May miss nuance — read the thread below.

  1. #1

    The oil market just passed its breaking point. And it doesn’t matter if the Strait of Hormuz opens tomorrow. Here’s why the damage is already done 🧵

  2. #2

    Even if a ceasefire is signed TODAY: — Floating tankers need 30–40 days to offload — VLCCs rerouted to the US need 3+ months to return — Onshore ME storage needs to drain ~200M bbls first The supply gap doesn’t care about peace deals

  3. #3

    Cumulative storage lost from Hormuz closure: End of April → 1.2 billion bbls End of May → 1.59 billion bbls End of June → 1.98 billion bbls This is 4x larger than any supply outage in history. There is no playbook for this.

  4. #4

    The cycle playing out right now: ↑ Crude prices → Compressed refining margins → Lower refined product output → Product storage draws → Higher margins again → Higher throughput → ↑ Crude prices again Rinse. Repeat. Until something breaks.

  5. #5

    By end of July, US commercial crude storage could fall below 400M bbls — near operational minimum. At that point, the Trump administration faces a binary choice: Ban crude exports. Or watch US refineries shut down. Neither option is good for markets.

  6. #6

    The only thing that “balances” this market now is demand destruction on the scale of COVID lockdowns. Not lower prices. Not diplomacy. Government mandates forcing people to use less fuel. That’s the math. $95/bbl is not the answer.

  7. #7

    The last marginal barrel — the one that keeps a refinery running vs. shutting down — What does it trade for? Nobody knows. And that’s the most terrifying thing about this crisis. What’s your number? 👇

  8. #8

    Source & credit: @HFI_Research Full write-up: “The Breaking Point Is Here” — published April 2026. If you’re not following them, you’re missing the sharpest oil market analysis on this platform