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Yesterday, the US Department of Energy reported that crude oil stockpiles in the Special Petroleum Reserve (SPR) have fallen below 300 million barrels, equivalent to just over two weeks of supply. Today’s chart shows that since the closure of the Strait of Hormuz, the US and other IEA members have depleted some 280 million barrels of their reserves. Re-routing, SPR releases and weak demand (largely in China) have collectively absorbed most of the output loss from Hormuz. Absent these counterweights, the oil market would face a deficit of 17 million barrels a day. Instead, it faces a more manageable shortfall of 2.5 million barrels / day. …Many of these offsets are either exhausted or unsustainable. In this context, we find a 72% chance that Brent trades above current levels over the next three months. For oil to fall sustainably, a potential Iran-Oman agreement would have to last.