{"id":3184,"date":"2026-06-11T01:00:00","date_gmt":"2026-06-10T22:00:00","guid":{"rendered":"https:\/\/mikhailinvest.com\/traders-are-shorting-oil-as-if-the-hormuz-crisis-is-over\/"},"modified":"2026-06-11T01:00:00","modified_gmt":"2026-06-10T22:00:00","slug":"traders-are-shorting-oil-as-if-the-hormuz-crisis-is-over","status":"publish","type":"post","link":"https:\/\/mikhailinvest.com\/ru\/traders-are-shorting-oil-as-if-the-hormuz-crisis-is-over\/","title":{"rendered":"Traders Are Shorting Oil As If The Hormuz Crisis Is Over"},"content":{"rendered":"

In yet another sign that the paper oil market may be too complacent about the magnitude of the supply disruption in the Middle East, trades have been boosting their short positions in oil futures for most of the past two months.<\/p>\n

Since the beginning of April, portfolio managers have been increasingly betting that oil prices would fall, according to the latest available commitment of traders (COT) data from exchanges as of June 2.<\/p>\n

Shorts on Brent Crude tripled between the end of March and the beginning of June, per the data compiled by energy analyst John Kemp<\/a>.<\/p>\n

As of June 2, the short positions in Brent Crude<\/a> had jumped to their highest level since January, when the U.S. captured Venezuelan leader Nicolas Maduro and the market expected increased supply from Venezuela in the coming months.<\/p>\n

The surge in short positions and the weeks-long selloff of longs in the past eight weeks suggest traders are betting that supply will be restored soon. Related: Solar Tops Coal in U.S. Power Mix for the First Month Ever<\/a><\/strong><\/p>\n

The paper market plays on hopes, expectations, sentiments, and fears, and the sum of all these right now appears to be that the hedge fund and portfolio manager community is reluctant to bet on a summer of actual physical supply shortages.<\/p>\n

But the paper market may soon face the reality of crumbling global inventories, including in the United States, where stocks at Cushing, the delivery point for WTI Crude<\/a>, are just a few weeks away from dropping to minimum operational levels.<\/p>\n

Too much noise about the ceasefire, which is being tested almost daily with one strike or a retaliatory hit after another, doesn\u2019t help the paper market that may have become too detached from the magnitude of the supply loss.<\/p>\n

Traders react to every signal of \u2018imminent deal\u2019 with selloffs, only to start buying oil futures again when Israeli strikes in Lebanon, U.S. \u2018self-defense\u2019 strikes on Iran, or Iranian hits at regional infrastructure threaten to unravel the fragile ceasefire.<\/p>\n

All the while, paper market participants continue to hope for an imminent resolution and a reopening of the Strait of Hormuz that would flood the market with oil. And that\u2019s been their hope for three and a half months now.<\/p>\n

The thing is, even a full reopening of the Strait would not lead to immediate relief for buyers. First, ship owners and operators will need to have guarantees that they wouldn\u2019t be caught off-guard with stranded tankers again. Then, the oil cargoes will need weeks to reach buyers\u2014weeks that the market may not have amid peak summer demand season.<\/p>\n

The world has lost about 13 million barrels per day (bpd) of oil supply,\u00a0the International Energy Agency (IEA)\u00a0\u0441\u043a\u0430\u0437\u0430\u043b<\/a> in its market report for May.<\/p>\n

\u201cMounting supply losses from the Strait of Hormuz are depleting global oil inventories at a record pace,\u201d the IEA said, adding that observed global inventories, including oil on water, were drawn down by\u00a0250 million barrels<\/a>\u00a0over March and April, or by 4 million bpd.<\/p>\n

Sooner rather than later, oil on water volumes and onshore inventories will be depleted, leaving demand destruction<\/a> the only buffer to cap oil price spikes.<\/p>\n

Moreover, the extreme price volatility and the noise about a deal coming any day now are sidelining part of the trader community.<\/p>\n

\u201cParticipants continue to sit on the sidelines, given the market’s fluidity, uncertainty, and headline-driven nature,\u201d ING\u2019s commodities strategists Warren Patterson and Ewa Manthey said in a \u043f\u0440\u0438\u043c\u0435\u0447\u0430\u043d\u0438\u0435<\/a> on Wednesday.<\/p>\n

\u201cThis is reflected in the aggregate open interest in ICE Brent, which has continued to trend lower and stands at its lowest level since August 2025.\u201d<\/p>\n

Many traders have been shorting oil since April in the hope that the ceasefire and the negotiations would yield a peace deal before the world runs out of buffers to offset most of the supply disruption.<\/p>\n

\u201cThe buffers and the shock absorbers are being steadily drawn down, and the ability for the market to absorb this imbalance is drastically diminished today versus where we started and over the next few weeks,\u201d Chevron\u2019s CEO Mike Wirth\u00a0\u0441\u043a\u0430\u0437\u0430\u043b<\/a>\u00a0at the Bernstein 42nd Annual Strategic Decisions Conference at the end of May.<\/p>\n

\u201cWe’re likely to see those pressures flow through more directly to physical prices, and there’s more upward pressure that I would expect as we get into June and certainly into July.\u201d<\/p>\n

According to the Wednesday note of ING\u2019s strategists, \u201cWith no imminent deal in sight and with the global oil market tightening significantly every day, we see upside to prices, particularly if these disruptions linger into the third quarter, a period of seasonally stronger oil demand.\u201d<\/p>\n

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