Record oil-on-water volumes limit the next leg higher in crude

Brent front-month prices have rallied by around $10/bbl over the past 10 days as renewed military strikes between Iran and the US reignited fears over Persian Gulf supply. Yet, despite flows through the Strait of Hormuz falling sharply, the rally has begun to lose momentum. The reason lies in the physical market: record volumes of crude already on the water are providing refiners with a sizeable inventory cushion, limiting the urgency to chase replacement barrels.