Bibliography

  • https://www.hfir.com/p/public-memo-i-cant-believe-we-are

Source Attribution

HFI Research public memo synthesizing factual market observations from public sources including Bloomberg, Reuters, and industry participants during the acute Hormuz crisis.

Published: May 2026
Author: Wilson (HFI Research)
Source: hfir.com

Summary

HFI Research analyst Wilson publishes a public memo flagging an incoming record crude draw for the week of the report. The analysis is based on tanker flow data showing a convergence of factors: (1) residual discharging of inbound VLCCs temporarily lifting imports, (2) a large armada of empty VLCCs heading to the US, (3) refinery throughput ramping to 16.8–17 M b/d, and (4) US crude imports falling to ~5.5 M b/d. The net commercial crude inventory draw by mid-May is projected at up to 12 million bbls — even before counting the SPR release.

Key Data Points

Incoming Crude Draw Dynamics

  • Residual discharges: Some inbound-laden VLCCs are still offloading, temporarily keeping US crude imports elevated. These same vessels become export volumes within 1–2 weeks.
  • Armada of empty VLCCs: A large fleet of empty VLCCs is en route to the US — these will drain commercial crude inventories.
  • Refinery throughput: Ramping to 16.8–17 M b/d
  • US crude imports: Falling to ~5.5 M b/d due to lower inbound flows
  • Net commercial draw by mid-May: Up to 12 M bbls

Combined Draw with SPR

  • EIA may report -10 to -12 M bbls of commercial crude even with a ~10 M bbl SPR release
  • This implies a cumulative crude draw of 20–22 M bbls per week

Historical Context

Since EIA began publishing weekly oil data in 1982, there have been 41 weekly crude draws over 10 M bbls. The largest ever recorded (commercial + SPR combined) was the week of July 28, 2023 (-13.355 M bbls). That week already ranks as the 6th largest crude draw in history. The estimated draw for the upcoming EIA report ranks as the 8th largest.

Note: Physical oil traders are reportedly very aware of this. Algo trading funds that buy/sell oil based on EIA releases are not.

US Product Inventories

  • US product storage is already approaching seasonal lows for this time of year
  • Next few weeks will push product inventories into brand-new territory

Analysis

Not 2022

Wilson explicitly debunks comparisons to 2022 as absurd and irrelevant to the current situation.

Physical vs. Financial Market Disconnect

Physical oil traders are aware of the looming draw. Algorithmic trading funds that react to EIA data releases are not — creating a potential disconnect between physical market reality and price signals.

Positioning

Wilson states intent to position accordingly, characterizing the market situation as a gift.

Analyst Disclosure

Wilson reports a beneficial long position in USO, UCO, BNO through stock ownership, options, or other derivatives.