Category: Quantitative
Source: HFI Research Substack / Business Insider / The Guardian, May 18-26, 2026
Description
A real-time tracking metric for the net drain rate on global oil inventories during the Hormuz crisis. Calculated as: production shut-in minus demand loss minus SPR releases.
Formula
Implied Net Flow = Production Shut-In - Demand Loss - SPR Releases = 12 mb/d - 2 mb/d - 2.5 mb/d = -7.5 mb/dComponents
| Component | Value | Notes |
|---|---|---|
| Production shut-in | 12 mb/d | Gulf production offline |
| Demand loss | 2 mb/d | Price-driven demand destruction |
| SPR releases | 2.5 mb/d | US + allied SPR releases |
| Net implied flow | -7.5 mb/d | Net drain on inventories |
Context
- US had 1.6 billion barrels in stocks (week ending May 8)
- Down 67 million barrels from start of April
- At -7.5 mb/d, US stocks would deplete within ~8 weeks from late April
Significance
The -7.5 mb/d implied flow provides a real-time tracking metric that can be monitored against EIA weekly data. It quantifies the pace of inventory depletion and makes the late-June exhaustion timeline testable.
Relationship to Other Concepts
- Operationalizes "Inventory Depletion" (existing CONCEPTS.md) with a specific rate
- Provides the mathematical basis for "Point of No Return" (HFI Research) — at -7.5 mb/d, the math is clear
- Complements "Tank Bottom" (JPMorgan) — both converge on late June, but via different analytical paths