Oil: Barreling Through a Crisis

Research evidence excerpt

Oil: Barreling Through a Crisis

Equity Research

Earnings Revised — June 9, 2026

Exploration & Production

Independent Refiners

Integrated Oil & Gas

International E&P

Our Call Sam Margolin

Prominent O&G executives have warned of an impending global crisis if the Strait of Equity Analyst | Wells Fargo Securities, LLC

Sam.Margolin@wellsfargo.com | 212-214-8496

Hormuz does not open by mid-Summer. A >$150 oil price scenario is unlikely to play out,

Emma Liangbut refined products are severely out of balance, stressing the complex.

Associate Equity Analyst | Wells Fargo Securities, LLC

Emma.Liang@wellsfargo.com | 212-214-3322

Sounding the Alarm: The context of this note is increasingly vocal warnings from O&G Maya MacPherson

leaders/executives that the world is approaching a severe oil shock should the Strait of Associate Equity Analyst | Wells Fargo Securities, LLC

Hormuz remain closed into mid-Summer. Is a >$150 oil price scenario likely, and what Maya.L.Macpherson@wellsfargo.com | 212-214-5324

does it mean for equities? Observable s/d is more disrupted in products than in crude,

which means demand destruction could ensue before another oil price spike; elevated

crack spreads have more duration than crude, in our view.

Imbalance: Refined product supply globally is impaired by ~8.7MM bpd, including

products formerly transiting the Strait plus observed refinery utilization declines due

to lack of crude supply. Crude oil s/d is in a ~5MM bpd shortage, taking into account

observed SPR release, re-routed Saudi volumes to its West Coast, and lower refinery

utilization. The ~1.4B total bbl displaced by the war (~14MM bpd over 100 days) is tilted

to products.

Product Inventory and Demand: Refined product inventory outside the US is inflecting