If the Strait of Hormuz doesn't open soon, as seems likely, there will be a massive economic crash

[GreatGazoo]

37. Since oil is sold as futures there is more profit when buyers panic about the future

It's like if someone was selling fire insurance and we are in a wicked drought. And they run around saying 'Wow our experts say this drought is going to last another year so you should buy at these high rates now before we have to raise rates even higher.' They are trying to rush more people to pay the high rate before it rains.

If the USA accepts the $1 per barrel deal that Iran wants on the Strait then oil goes back down to like $70. Exxon wants to sell as much as they can as high as they can before any bigger deal is confirmed and prices drop further. Some predict a glut about two weeks after a deal that holds.

Toward the bottom of linked:

If a peace deal is signed that appears likely to hold, then two-to-four weeks looks like a sensible starting point for clearing the Gulf backlog and restoring shipping patterns, with flows possibly ramping back towards full levels after another two-to-four weeks, according to Houston-based Vikas Dwivedi, global energy strategist at Macquarie Group.

In this base-case scenario, in which the market believes a deal is real and has staying power, the sell-off would be immediate and large, approximately US$20 in one week. This would be followed by a two-week consolidation period, and then a period in which logistical and financial issues are repriced. “After this, we expect the market to end up with far too much oil again as mitigation sources of supply continue as Hormuz flow ramps up, creating a physically driven overshoot to the downside,” underlines Dwivedi. “Finally, prices trend toward a normalisation of crude supply and demand and a return to what we believe is the fair value range of US$65 to US$70 per barrel,” he concludes.

https://www.msn.com/en-us/news/world/inside-the-iran-deal-that-may-change-nothing-but-could-smash-oil-prices-anyway/ar-AA24yGAr