The Oil Bull Market Is Just Getting Started – Jeff Currie

Iranian political/security terms (large upfront payments and reparations) — plus the risk that escalatory events (e.g., Israeli strikes on Lebanon) could prompt Iran to re‑close strategic waterways — mean that even a signed deal may not quickly restore flows because wells, ships, crews and insurers take time to reposition; the recent partial Gulf release only returned ~1–2 mbpd, so physical recovery will be gradual and markets can remain tight.

The U.S. Strategic Petroleum Reserve sits at multi‑decade lows (current holdings ~340 mbbl vs a cited bare minimum of ~270–300 mbbl) with withdrawals averaging roughly 7–10 million barrels per week, creating inventory stress into a mid‑July peak‑demand window; U.S. exports have risen from ~4 to ~6 mbpd with ~1.2 mbpd of that supplied by SPR draws, which is a primary cushion keeping Europe supplied while other regions remain exposed.

Near‑term production growth is constrained (at best ~100–150 kbpd), U.S. output is near pre‑COVID peaks, and sector capex is well below needs; combined with an investor exodus of long‑term fundamental capital and the requirement for multi‑year, multi‑trillion‑dollar investment to rebuild capacity, this points to structural underinvestment and prolonged market tightness absent a major demand slump.

Speakers argue major tech firms now behave like cyclical, capex‑intensive producers of 'AI compute' yet trade at much higher multiples than commodity producers, and because energy companies currently generate materially stronger free cash flow yields, a material tech correction or AI disappointment could trigger a rotation into commodities — though such rotations typically require years of capital reallocation and can overshoot into later gluts.