Market transitioning from price shock to reality of shortages
March 19, 2026
The DOE inventory report had crude stocks up 6.16 million barrels, gasoline supplies were down 5.44 million barrels, and distillate were down 2.53. million barrels.
Total crude stocks are now at 449.259 million and last year at this time they were 436.968 and the three-year average is 454.397.
Total gasoline supplies are 244.040 and last year they were 240.574, and the three-year average is 233.648.
Total distillates are now 116.904 million barrels and last year they were 114.783 and the three-year average is 116.569.
Propane inventories were up 810,000 barrels putting total stocks at 72.485 million and last year they were 43.349 and the five-year average is 45.443 million barrels.
Midwest propane inventories were up 259,000 barrels putting total Midwest stocks at 14.011 million and last year they were 8.709 million and the 5-year average is 10.539.
Gulf Coast supplies were up 635,000 barrels, putting total stocks at 52.410 and last year they were 28.615 million and the 5-year average is 28.044.
According to JP Morgan’s Global Head of Commodity Research, Nathasha Kaneva, the market is transitioning from a price shock narrative to a physical shortage reality, particularly in Asia. 18 days into the conflict, with expectations for several more weeks (potentially months) of sustained escalation. Naval escorts are viewed as too risky. Importantly, reopening the Strait is the critical variable for oil market normalization – ending the conflict alone is unlikely to restore flows. JP Morgan has also said the demand destruction has begun with travel and freight showing the most at this point.
I must admit this conflict has gone on longer than I expected and it is not over yet.
Ray Dalio, billionaire hedge fund manager says the Strait of Hormuz is America’s final battle. He wrote a long warning on X, saying the war comes down to a single variable: who controls the Strait of Hormuz. If Iran retain any ability to control or negotiate passage, the US will be seen as having lost, regardless of how the conflict ends.