HORMUZ REOPENING POST — SOURCES PRIMARY DATA - EIA Weekly Petroleum Status Report: https://www.eia.gov/petroleum/weekly/ SPR at 374.2M (May 15), down 41.2M from 415.4M. Weekly draw 9.9M bbl. - IEA Oil Market Report, April 2026: https://www.iea.org/reports/oil-market-report-april-2026 360M bbl March supply loss, 440M projected for April (800M cumulative). Global inventories -85M in March. - Brent/WTI: $103.54/$96.60 close Friday May 22. Markets closed Monday May 25 (Memorial Day/UK bank holiday). Gapped to ~$95/~$91.55 Tuesday May 26. ANALYST QUOTES (Fortune, May 9, 2026) https://fortune.com/2026/05/09/iran-war-is-global-oil-stockpile-reserves-releases-strategic-petroleum-reserve/ - Natasha Kaneva (JPMorgan): "OECD inventories could reach operational stress levels early next month, and then operational minimum floors by September." "Not every barrel can be drawn." - Frederic Lasserre (Gunvor): "Top of my mind in terms of places facing imminent shortage is gasoline in Asia, with countries like Pakistan, Indonesia or the Philippines likely to be the first to face issues with tank bottoms." "If the Strait of Hormuz doesn't reopen by early June, some Asian countries will face a macroeconomic shock." MILITARY - Operation Project Freedom: launched May 4, paused May 5, 2026. Two US-flagged ships transited. Pentagon described as "defensive in nature, focused in scope and temporary in duration." Reported by BBC, NYT, Guardian. - Morgan Stanley "race against time" (May 11, 2026): 4.8M bpd drawdown rate, base case strait reopens within June, prolonged closure Brent $150/bbl. https://energynewsbeat.com/crude-oil/morgan-stanley-calls-out-that-oil-buffers-could-run-out-before-hormuz-is-reopened/ IRAN STRAIT CONTROL - Persian Gulf Strait Authority (PGSA): established May 5, 2026. Toll of up to $2M per vessel, payable in Bitcoin or yuan. https://maritime-executive.com/article/iran-s-persian-gulf-strait-authority-takes-steps-towards-operations (May 18, 2026) - Guardian (May 23, 2026): Trump claims peace deal "largely negotiated." MOU draft specifies no tolls during 60-day ceasefire. Iran's Fars news called claims "inconsistent with reality." https://www.theguardian.com/world/2026/may/23/trump-ceasefire-iran-strait-of-hormuz - Reuters (May 20, 2026): Iran consolidating Hormuz control via island checkpoints and diplomatic deals (paywalled) https://www.reuters.com/investigations/iran-is-consolidating-control-hormuz-with-island-checkpoints-diplomatic-deals-2026-05-20/ - Indian Express summary of Reuters investigation: https://indianexpress.com/article/explained/explained-global/iran-tightens-grip-on-hormuz-strait-10704225/ --- GLOSSARY OF TERMS --- PGSA (Persian Gulf Strait Authority): The self-proclaimed authority established by Iran on May 5, 2026 to administer vessel transits through the Strait of Hormuz. It sets tolls (up to $2M per passage in Bitcoin or yuan), issues transit permits, and maintains an official communications channel. Not recognized by the U.S. or most international maritime bodies; U.S. Treasury has warned it will sanction any entity that pays tolls to the PGSA. SPR (Strategic Petroleum Reserve): The U.S. government's emergency stockpile of crude oil, stored in salt caverns along the Gulf Coast (Texas and Louisiana). As of the May 15, 2026 EIA report, held 374.2 million barrels. The SPR is the world's largest publicly known emergency oil stockpile and has been drawn down aggressively during the Hormuz crisis to offset supply losses. Maximum drawdown rate is roughly 1M bpd under normal conditions, though waivers have pushed higher. IEA OMR (International Energy Agency Oil Market Report): A monthly publication by the IEA that provides the most authoritative data on global oil supply, demand, inventories, refinery activity, and prices. The April 2026 edition was released free of charge (normally subscriber-only) due to the Hormuz crisis. Key finding: global oil supply dropped 10.1M bpd in March 2026, the largest single-month disruption in history. The IEA coordinates emergency stockpile releases among its 31 member countries. MOU (Memorandum of Understanding): In this context, a draft agreement between the U.S. and Iran reportedly negotiated through Pakistani mediation. Key provisions per the Axios/Guardian report: Strait would reopen with no tolls during a 60-day ceasefire extension, Iran would be allowed to freely sell oil, negotiations on curbing Iran's nuclear program would follow, and the U.S. would lift its blockade on Iranian ports. Iran's Fars news agency called Trump's claims of a near-final deal "inconsistent with reality." bpd (barrels per day): Standard unit for measuring oil production, consumption, and trade flows. One barrel = 42 U.S. gallons (approx. 159 liters). Global oil consumption is roughly 102M bpd pre-crisis. The Strait of Hormuz normally handles about 20M bpd of crude and petroleum products (20% of global consumption). The 4.8M bpd drawdown rate means global inventories were being depleted by 4.8 million barrels every day. OECD operational minimum: The lowest level to which OECD (Organization for Economic Cooperation and Development) countries can draw down their commercial oil inventories before physical logistics break down. Below this threshold, pipeline batching, tank mixing, and terminal operations become impossible. JPMorgan estimated OECD inventories would reach "operational stress levels" (the warning zone above minimum) by early June 2026, and actual "operational minimum floors" by September 2026 if the Strait remained closed. Project Freedom: A U.S. military operation launched May 4, 2026 to escort commercial vessels through the Strait of Hormuz under armed naval protection. Two US-flagged ships transited successfully on May 4-5. The operation was paused on May 5 after Iran signaled it would treat any subsequent escorted transits as acts of war. The Pentagon described it as "defensive in nature, focused in scope and temporary in duration." No further escorted transits have been attempted as of May 26. War risk premiums: Additional insurance charges levied on vessels entering or transiting areas designated as active war zones. For the Strait of Hormuz, premiums skyrocketed after Iran's PGSA establishment and the outbreak of hostilities. These costs are typically calculated as a percentage of the vessel's insured value per transit. At peak, some war risk premiums for the Strait exceeded $1M per voyage, making it economically prohibitive for many commercial shippers even before considering PGSA tolls. This is a major reason shipping traffic through the Strait has collapsed.