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2/5 As the table below shows, crude oil futures prices for delivery into 2027 are trading in extreme backwardation. https://t.co/DjwNeNCkB2 3/5 Below is the calendar spread between the first contract (now April) and the 6th contract (now September). As the bottom panel shows, this spread is -25%, a record since the mid-1990s when the contract specifications were last changed. https://t.co/GvxZTcBpWN 4/5 The next chart plots the deferred contracts. The March 2027 (green) contract is up “only” 9.99%, while the April 2026 contract (blue) is up 53%. https://t.co/fFtIfXC8lU 5/5 The charts and table above show the market is pricing a short disruption of a few months in oil and not a significant elevation that “persists for the year.” The main reason for this thinking is that there has been no real reports of long-term infrastructure damage. Tankers are not transiting the Strait of Hormuz, so storages in the Middle East are full. Production is slowing as a result. When the ships start moving again, the system will start supplying the world with crude.