JPM with another excellent note.
…reopening the Strait has become the market’s most time sensitive priority. The last tanker to clear Hormuz on February 28 is expected to reach its destination around April 20, marking the point at which preclosure barrels are fully exhausted from the global supply chain. Yet—and contrary to our expectations—large-scale refinery run cuts outside the Middle East have not materialized. Asian refiners appear to have reduced throughput by only around 2 mbd due to crude shortages in addition to seasonal maintenance, with China accounting for roughly 1 mbd, Japan 0.4 mbd, and the remainder spread across Singapore, Malaysia, and India.
This implies that most of the missing 13 mbd of Persian Gulf supply has instead been bridged by a combination of aggressive inventory draws and involuntary demand destruction, as fuel availability becomes increasingly difficult to secure.
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