Eurodollar University This Should NOT Be Happening in Oil Markets
Apr 1, 2026
They probe why oil prices seem strangely low despite a massive supply shock and shipping disruptions through the Strait of Hormuz. They point to panic buying, extreme futures spreads, and Asian importers reshaping global flows. They highlight soaring diesel and jet fuel costs, tanker diversions, and how quickly inventories could run out if the situation persists.
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Hormuz Shutdown Means Oil Is Deeply Underpriced
- The scale of the Strait of Hormuz disruption implies oil is drastically underpriced relative to fundamentals right now.
- Jeff Snider cites a likely true price near $130–$150 given unprecedented chokepoints and global flow stoppages that began a month ago.
Account For Political Off Ramps When Positioning
- Beware political signals that create perceived downside off-ramps; don't get caught long expecting the war to end suddenly.
- Jeff Snider warns President Trump's public hints reduce traders' willingness to commit to long positions because of potential rapid price collapses.
Record Futures Spreads Reveal Immediate Supply Panic
- Futures spreads show panic: front-month WTI vs later months blew out to record levels, signaling desperate demand for immediate supply.
- Jeff Snider notes May–August WTI spreads reached about $19.20, and front-month gaps hit multi-dollar records indicating immediate scarcity.