US Faces Challenging Summer Gas Season, BofA’s Blanch Says

Added: 2026-05-18

[00:00:00]You've got a decent understanding on where we are right now. How big is the deficit for the crude market at the moment?

[00:00:05]We have a pretty large deficit. We're running around fourteen, fifteen million barrels a day short.

[00:00:10]15% short of what we need to see for prices to stabilize, go down to $60.70 dollars a barrel. So it's a it's a big gap. And, and, obviously, measures like this will help, ease market, pressures. And and, of course, we are going to peak demand season, which makes the deficit potentially even greater. So, yeah, so so I think I think, obviously, look. It's it's all about the Strait Of Hormuz. Can it reopen soon or not? And we've been talking about this now, I guess. I feel like we are into the into the tenth eleventh week, twelfth week.

[00:00:41]So it's not the eleventh year.

[00:00:42]Eleventh year. Eleventh year. Twelfth week. I don't know. But, I think what's what's interesting is we we I think the news over the weekend are very good news also what what we heard from on on the agricultural side because, at first, it felt like the only agricultural discussion was, rose seeds, but now it's actually corn and it's it's wheat. And all of that, I think, it's kind of probably the market relief. So I think it's a sign of goodwill that China wants to cooperate. And and I think it's important to understand.

[00:01:11]Mean, China is the world's largest exporter. The last thing they want is is to see a global recession. They need that export market.

[00:01:18]Well, let's start with oil, and let's assume a lot of things. Let's assume nothing changes.

[00:01:22]And the existing strategy of The US is to maintain the blockade, to get Iran to suffer, because they believe we're very close to breaching storage capacity. Given the inventory draw that you're seeing globally at the moment, if I had to ask you, assuming everything else remains the same, what happens first? Tank bottoms in the West or tank tops in Iran?

[00:01:40]I I think I think tank tops in Iran are are pretty close. Then again, we think we think that Iran can survive roughly with one, one vessel a week, a a quarter of a million barrels a day. That they don't really need that much money to to to pay, their bills. On the other hand, also, we've seen Iran, basically shutting down exports for about four years after the, repeal of the JCPOA initially during the, Trump one point o administration. So I I don't really think that that the Iranians, because they have to shut down fields, they're necessarily I mean, I mean, they've been there before kind of thing. Right? While as as in the West, the challenge is that, obviously, we're gonna have a much more challenging summer season. Right? And and and people are not gonna be happy.

[00:02:27]So not only you're paying higher prices, but you may have availability issues, and and and that can be a problem. Are we at tank bottoms anywhere in the world right now?

[00:02:34]So some of the countries in Asia, are really experiencing a lot strain. If you're a large energy importer with a large current account deficit, say, like India or others, you are running into a lot of problems. Right? I mean, Japan's seen a collapse in inventories. We've seen a number of Asian, countries as well in the same position. This is primarily a Pacific crisis. It's not an Atlantic crisis yet, and that's why we haven't felt as much, pain in in in kind of Europe, US.