The David Lin Report · Thursday, October 1, 2026
Despite an 80% recovery in Strait of Hormuz oil traffic compared to pre-war levels, crude oil prices remain high due to a persistent supply deficit. Markets have been in deficit for months, steadily depleting inventories, including strategic reserves. Rebuilding these buffers and achieving a sustained market surplus is necessary to bring prices down significantly.
“So that's about 80% of pre-war if I were to extrapolate that math is not you know, is not 20% higher than the pre-war average price of the oil price. So, you know, there's still a major premium despite the fact that the throughput is 80%.”
“We have had flows in deficit now, supply flows in deficit for six, seven months, we have gradually continued to wear down inventories, buffers, SPRs, everything else through the system.”
“We need markets in surplus for a prolonged period of time to rebuild those inventories. And only after we flip into into surplus, Then we will, you know, gradually begin to weaken prices over time.”