Kick the Can, Bid the Barrel

Research evidence excerpt

Kick the Can, Bid the Barrel

Energy | Energy Commodities

May 20, 2026

Stephen Richardson Kick the Can, Bid the Barrel

212-446-5639 Equity market strength and risk assuaging headlines have kept a

stephen.richardson@evercoreisi.com lid on flat price. Hormuz re-opening still needed, impacts linger.

Chai Zhao, CFA Another month of oil market data has provided a clearer picture of the

646-321-3097 adjustments to accommodate the largest supply outage in history.

chai.zhao@evercoreisi.com

China has acted as a stabilizer reducing inventory builds and exporting

Chris Baker, CFA

product. Demand rationing has taken multiple forms across products 917-741-8669

chris.baker@evercoreisi.com with alternative fuels (coal, LNG) playing a role. SPRs and oil on the

Jason Bandel water have likewise helped. Buffers have quelled physical market

212-653-9044 strength as commercials wait on the long-anticipated reopening of the

jason.bandel@evercoreisi.com straits and lower prices. Hindsight is clear but does nothing to change

Chris Lee the unsustainable nature of the outage. Having consumed domestic

212-653-9041 commercial stocks and SPRs, the world is now drawing on US

chris.lee@evercoreisi.com inventories to find balance, extending the timeline of recovery for

inventories post crisis. This month we kick the can on a resumption of

flows to 4 months (vs. 10 weeks) with the acknowledgement that

(MMBPD) Old New resumption may be uneven and take time (1-2 months of mine clearing

2026 Demand Growth increasingly discussed by industry). Market participants broadly accept

Evercore ISI -0.04 -0.36 the unsustainable nature of the situation but seem to trust that

resolution will come before the crisis escalates again. We maintain our

IEA -0.08 -0.42