To The Moon

Oil is easing—but has the Hormuz supply shock really eased?

If you saw my previous post, you’ll know I’m watching for mean reversion in oil. Today’s move is encouraging for that thesis: USO was recently around $148.23, down $5.59 (3.63%), while WTI also fell sharply.

One possible reason: more Middle Eastern crude is still finding ways to reach buyers, despite the disruption. Saudi Arabia has reportedly increased exports through Hormuz after its East–West Pipeline was attacked. Reuters reported that 22 tankers carrying around 42 million barrels exited the strait during the week of September 13. But the wider picture is still far from normal: just 17 commodity vessels transited over the weekend, compared with roughly 125 vessels a day before the war. Tanker availability and shipping costs also remain major constraints. (Reuters⁠)

So I see this as a positive development for my bearish oil thesis, not proof that the supply shock is over. Workarounds are helping keep barrels moving, but traffic through the region remains severely disrupted. I’m looking for sustained normalization—not one encouraging headline.

A note on my USO position

The image shows my January 2029 $161 short synthetic position: long puts paired with short calls at the same strike and expiry. It’s not delta-neutral; it behaves approximately like a short position in USO. With two contracts, a $1 fall in USO would roughly imply a $200 gain, all else equal.

But the P/L shown by a broker may not track that simple estimate exactly from one moment to the next. Long-dated option quotes can be wide, stale or updated at different times, so the displayed marks may not reflect what the paired position could actually be closed for. That’s why I’m careful to assess both legs together—and use a combination limit order when opening or closing—rather than relying on a single P/L number.

This is my personal trade thesis and position, not a recommendation to buy or sell. Not financial advice!