Oil Ground Up

Eric Nuttall joins the Oil Ground Up podcast to discuss what he believes is the largest energy supply shock in modern history following the prolonged closure of the Strait of Hormuz. He explains why markets remain dangerously complacent despite massive global inventory drawdowns, rising geopolitical risks, and the potential for structurally higher oil prices well into the future. The conversation dives into why energy equities still appear deeply undervalued, how Canadian oil producers could benefit from a long-term supply crunch, and why Nuttall sees a generational opportunity emerging in the sector. Nuttall also outlines the risks investors should be watching closely, including possible U.S. export restrictions, weakening demand from higher fuel prices, and continued volatility tied to Middle East tensions. The discussion further explores the future of U.S. shale growth, Canada’s pipeline constraints, and the strategic importance of energy infrastructure in an increasingly unstable global market. From inventory math to capital flows, this episode offers a deep dive into the macro forces reshaping global oil markets and the investment landscape around them.

Maritime intelligence expert Michelle Bockmann joins the Oil Ground Up podcast to unpack the unprecedented disruption in global oil flows following the effective closure of the Strait of Hormuz. She explains how Iran’s shadow fleet has continued operating under the radar while broader tanker traffic has collapsed, with U.S. enforcement sharply curtailing exports and reshaping global supply routes. The conversation dives into the complexities of tracking “dark” vessels, the role of satellite intelligence, and the growing challenges posed by GPS jamming, drone warfare, and misinformation in maritime data. Bockmann also highlights the human and commercial realities behind the crisis, from stranded crews and insurance breakdowns to the difficult risk calculations facing shipowners. As oil markets grapple with dislocated supply chains, she outlines why reopening the Strait could take weeks to clear and months to normalize. The discussion further explores geopolitical ripple effects, including OPEC tensions and shifting trade flows through alternative routes like the Red Sea. Ultimately, Bockmann offers a grounded view on what to watch next, emphasizing that while the blockade is effective, uncertainty and disruption remain the defining features of today’s global oil market.

Amena Bakr, the Head of Middle East Research at Kpler, joins Rory to provide an inside look at the functional closure of the Strait of Hormuz, where daily traffic has collapsed from 170 vessels to just 5% of its pre-war levels. The sources indicate that even with an optimistic base case for normalization in August, clearing the backlog of 800+ trapped ships will likely take at least two additional months. Amena warns that the threat of maritime mines remains a strategic "wild card" that could extend the recovery timeline by up to six months.

The discussion breaks down the "Iran Lane" management system and the controversial $2 million cryptocurrency tolls being reported by vessel owners seeking to bypass the blockade. With roughly 13 million barrels per day of production shut in, the discussion explores the physical damage to downstream assets and a potential five-year recovery timeline for Qatari LNG trains. Johnston and Amena address the market's underreaction to the crisis, citing the distorting effects of presidential social media posts and alleged price manipulation that has kept Brent near $100. Beyond the energy sector, the blockade is triggering a "reality check" for global supply chains, specifically impacting the helium supply necessary for semiconductors and medical imaging. Finally, the conversation highlights how OPEC is attempting to provide a "steady hand" and structural predictability while the region prepares for a post-war status quo where regional pipelines may permanently replace the Strait

Adi Imsirovic, a veteran oil trader and former academic, returns to the podcast to break down the mechanics of the Brent market at a moment of historic disruption. With more than 13 million barrels per day of supply offline and extreme volatility across the curve, Imsirovic explains how oil pricing actually works beneath the surface—distinguishing between physical “dated” Brent and financial futures, and why the recent divergence between the two is not a market failure, but a reflection of timing, scarcity, and panic-driven demand for immediate barrels.

The conversation dives into the structure of the Brent complex, including forward markets, CFDs, and the role of exchange-for-physical mechanisms that link paper and physical trading. Imsirovic argues that the record backwardation—at times reaching nearly thirty dollars between prompt and forward barrels—signals not just tightness, but outright panic in physical markets as refiners scramble to secure supply. These dynamics are further amplified by surging premiums for specific crude grades and growing dislocations between refinery margins and input costs.

Finally, the discussion turns to what the futures curve is really signaling. While front-end prices reflect immediate scarcity, longer-dated contracts suggest expectations for eventual resolution, with OPEC spare capacity and potential demand destruction looming in the background. Imsirovic emphasizes that price structure—not just flat price—holds the key to understanding oil markets, particularly in an environment shaped as much by geopolitical shocks and policy volatility as by traditional supply-demand fundamentals.

John Love, the CEO of USCF Investments, joins the podcast to celebrate the 20th anniversary of the United States Oil Fund (USO), which was the third commodity ETF ever launched. He explains that unlike physical gold funds, USO provides investors with access to the oil market by holding futures contracts, effectively "equitizing" a complex asset class that would otherwise require managing margin calls and rolling positions. A key distinction Love makes is that USO is designed to track the daily economic return of its underlying contracts, not the long-term spot price of oil, meaning its performance is heavily influenced by the "roll yield".

The conversation addresses the current record backwardation in WTI, which recently saw prompt spreads hit $15 a barrel, a historic level of physical scarcity driven by the ongoing Hormuz energy crisis. This volatility is compared to the "uncharted territory" of April 2020, when futures prices plummeted to negative $37, forcing the fund to temporarily shift from a front-month strategy to a multi-contract basket to ensure stability.

Finally, while there is political pressure for "drill, baby, drill" in the U.S., Love observes that many producers remain cautious due to capital discipline and the inability to lock in high spot prices on the back end of the futures curve.