Oil prices have swung drastically over the last couple months. The market was unprepared for the US to grant waivers amounting to nearly one million barrels/day to fill the void expected to be left by the drop in Iranian exports. Instead of Iranian exports plunging to almost zero by November, they have been allowed a more shallow glide path. This has thrown the oil market off-balance by about one million barrels/day.

Especially strange is the fact that the US asked Saudi Arabia to pump another approximately one million barrels/day earlier in the year, and the Kingdom has delivered, taking OPEC’s production up by one million barrels/day since June. Yesterday, Saudi Arabia floated the idea of trimming OPEC’s production by one million barrels/day by December.

Adding to the oddities in the energy market is the nose-dive in US exports of petroleum products to China. Similar to disruptions seen in the soybean market, this seems to have a geopolitical undertone.