Iran disruption tracker #50: Ceasefire on life support ... POTUS China visit in focus

Research evidence excerpt

Iran disruption tracker #50: Ceasefire on life support ... POTUS China visit in focus

ran over this strait and the determination of its legal

arrangements is Iran's right as a coastal state.

●No resumption of military action expected ahead of POTUS visit to China May 13-15 Beijing has positioned itself

as a mediator to de-escalate. The visit aims to prevent further global economic disruption, particularly through the

Strait of Hormuz, while navigating high trade tensions and China's continued economic support for Tehran.

Things to watch

●Should the prospect of an extended disruption increase, expect another round of offset actions - not only by

countries looking to pare demand, but also from the IEA where Director Faitih Birol has suggested a second (or

3rd) round of strategic petroleum reserve releases could take place. Simple math: every 400mm bbls buys global

inventories another month of supply disruption cushion - but also reloads the likelihood of a replenishment cycle,

supporting longer dated oil prices.

●Monitoring the IEA's Energy crisis: policy response tracker now estimates the cumulative actions by mainly non-

OECD country actions could reduce global demand by 5.5mm bpd. Many of these actions were suggested as part

of its 10 point plan.

●The next IEA monthly oil market report will be published on May 13: however since its last report, the proposed

base case at that time assumed a recovery of full production from Gulf producers by October - and 80% recover by

July. Based on comments by Saudi Aramco this now looks unlikley - and we fully expect a more cautious recovery

'base case' on May 13. Note the OPEC oil market repory will also be published on May 13th.

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