Odd Lots Rory Johnston on How Oil Could Surge to Over $200 a Barrel
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Mar 10, 2026 
Rory Johnston, founder of the Commodity Context newsletter and an oil analyst who teaches at the University of Toronto, explains how a prolonged Strait of Hormuz disruption could push oil past $200 a barrel. He discusses why refined fuels spiked first. He outlines supply rerouting limits, the role of spare capacity, and how duration and bidding dynamics could magnify shortages and price spikes.
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Strait Of Hormuz Is A Market-Defying Shock
- The closure of the Strait of Hormuz is a unique, non-market-fixable shock that industry analysts use as a worst-case thought experiment.
- Rory says it's so large and physical that normal market adjustments can't quickly resolve the loss of flow through Hormuz.
Refined Products Spike Before Crude
- Product markets (jet fuel, diesel, gasoline) can spike ahead of crude because refiners preemptively cut runs to avoid running out of feedstock.
- Rory explains refiners slow run rates to extend runway since shutting a refinery is costly and slow to restart.
SPR Should Be Used Early In Massive Shocks
- Strategic petroleum reserves exist for this exact type of disruption, and not using them early reduces policy options later.
- Rory criticizes reluctance to tap SPRs and notes global SPR flow rates can't fully replace a Hormuz-sized outage.