WTI Prints $65 Handle as Hormuz Reopens and Tankers Stampede for Home

Crude cracked $65 on the July tape after Strait traffic normalized and a wall of delayed barrels hit water at once, a scenario the pits had all but written off.

WTI touched $64.91 at 3:12 a.m. local, the first $65 handle the July book had seen, and the pit that priced it at a rounding error spent the morning apologizing to itself.

The mechanism was plumbing, not politics. When Strait of Hormuz traffic returned to normal by July 31, roughly nine days of barrels that had idled offshore all released at once, and the Shipping Desk counted 41 laden tankers clearing the chokepoint in a single 24-hour window. Storage that was priced for scarcity flipped to glut overnight.

"You cannot un-park a floating traffic jam gently," said Dr. Casimir Blum of the Meridian Macro Institute, watching the front-month curve invert on a screen taped to a filing cabinet. "Everyone hedged for a spike. Nobody hedged for the exhale."

The Shipping Desk logged demurrage claims cratering by 60 percent in a week. One Rotterdam trader, refreshing a spreadsheet at his kitchen table, described the tape as "a fire sale where the fire went out."

Refiners now hold cargoes bought high and worth less. Blum expects two weeks of noise before the glut clears. The odds, everyone agreed, had been comically slim.

— Timeline B. In our universe, the odds of this were 1.8%.