Summary

• Oil prices are falling as the Strait of Hormuz ship traffic resumes, signaling normalization and easing supply constraints.
• Sovereign petroleum reserves are depleted, creating a structural floor for oil prices; they are unlikely to fall below $65/barrel through year-end.
• I remain bullish on energy extractors like XOM and BHP, midstream MLPs, and the UAE as a post-OPEC production leader.
• I'm adding to S&P 500 positions, projecting a large rally by year-end, as markets underprice earnings and overprice oil disruption risks.

I haven't covered the Strait of Hormuz or oil flows materially since I wrote “Blockading the Blockade” back in April. Truthfully, it's because the situation hadn't changed. Oil was over the big jump it made in March, but still elevated, and what was flowing

Analyst’s Disclosure: I/we have a beneficial long position in the shares of XOM, BHP, UAE, S&P 500 either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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