Francisco Blanch believes the backwardation in the oil futures curve is a warning sign, not a sign of comfort for future prices.

Francisco Blanch of Bank of America believes the paper oil market is priced for a perfect outcome and ignores the realities of a post-conflict energy economy.

Francisco Blanch forecasts a global oil market shortfall of 2 to 3 million barrels per day through the end of the year due to disruptions in the Strait of Hormuz.

Francisco Blanch predicts that even if 80-85% of oil flow through the Strait of Hormuz is restored in the next 2-3 months, it will take an additional six or more months to restore the final 10-15%.

The current Persian Gulf crisis is primarily an Indo-Pacific crisis, not an Atlantic Basin crisis.

Europe was more severely impacted by the 2022 energy crisis, which involved the loss of Russian gas coinciding with the collapse of French nuclear power output.

As a form of policy-driven demand rationing, Indian Prime Minister Narendra Modi's government is telling citizens not to drive.

The global oil market is facing a supply gap of 14 to 15 million barrels per day.

A long-term consequence of the current geopolitical conflict will be a major restocking cycle for all commodities, including oil and copper.

Global oil inventories could be drawn down by another 500 million barrels before the market faces a severe crisis.

The global oil supply gap is being managed by drawing 30-40% from inventories, with the balance coming from price and policy-driven demand rationing.

China acts as a monopsony in commodity markets, buying when prices are low and ceasing purchases when prices rise.

Brent crude prices are expected to normalize in a range of $70 to $75 per barrel or slightly higher, rather than returning to $60 per barrel.

The United States is a net energy exporter and, as a country, benefits financially from higher energy prices.

Following the imposition of a 'double blockade' by the U.S., China's oil imports have decreased from a range of 11-12 million barrels per day to 8 million barrels per day.

The current Persian Gulf crisis is primarily centered on oil, in contrast to the Russia-Ukraine war which was more focused on natural gas and power.

China's industrial strategy involves expanding production to lower prices, which eliminates competition, before prices eventually resettle at a higher level.

Global supply chains are expected to diversify away from China, leading to the construction of new factories in other regions.

Russia is the world's second largest exporter of petroleum products.

North America is currently long on petroleum products and crude oil.