The macro landscape is clear to anyone paying attention. The conflict in the Middle East has effectively shuttered the Strait of Hormuz, and despite the persistent narrative regarding diplomatic off-ramps, those channels are currently non-existent. This is not a temporary logistical hiccup; it is a structural impairment of global energy transit.

Take a look at the attached futures strip. The paper market is suffering from a massive disconnect. While the front-month contracts reflect the immediate panic, the back end of the curve is in deep backwardation. The market is pricing in a scenario where this conflict resolves by late summer and global supply chains immediately revert to a pre-war state.

That is an exercise in delusion. Conflicts of this scale do not resolve on such convenient timelines, and the physical infrastructure damage and insurance premiums alone will create a long-term floor for prices. The paper traders are entirely mispricing the medium-term supply constraints.…