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Oil Inventories Face Massive Drop

Global crude and product inventories could plummet by approximately 900 million barrels by the end of June, even if the recent ceasefire between the United States and Iran holds, according to Citi researchers. This projection, released on Monday, accounts for a 500 million-barrel drawdown already underway and an additional 400 million barrels expected due to production delays, logistical constraints, and lingering conflict damage.

The stark warning comes despite a ceasefire announcement by U.S. President Donald Trump on April 7, aimed at de-escalating tensions with Tehran. Yet, uncertainties loom large as traffic through the Strait of Hormuz—a critical chokepoint for global oil flows—remains largely halted. Oil prices surged 5% on Monday after the U.S. seized an Iranian cargo ship, stoking fears that the fragile truce could unravel.

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What’s going on?

• ‘Israel Never Talked Me Into the War’: Regime Change, Not Netanyahu, Drove Iran Decision, Trump Says (theDeepDive)

• Pakistan prepares for new round of U.S.-Iran peace talks as Trump offers mixed messages (Globe)

• Kuwait Declares Force Majeure on Oil Shipments as Hormuz Blockade Disrupts Persian Gulf Access (theDeepDive)

• Kevin Warsh to say Fed independence not threatened by political pressure (FT)

• US-Philippine Joint Military Drill Targets “Real-World Conditions” (theDeepDive)

• US low-cost airlines seek temporary tax relief to address soaring fuel costs (Reuters)

• Kuwait Triggers Force Majeure On Hormuz Oil Shipments (theDeepDive)

• Strait of Hormuz ship traffic briefly rose and then slowed after weekend attacks (CNBC)

• Carney Cuts Gas Tax But Canadians May Still Be Paying More (theDeepDive)

What’s the latest?

• Real Estate: Canada’s commercial real estate shows early recovery, with office vacancy falling to 13.6% (-1pp YoY) and industrial vacancy down to 3.5% (first drop since 2022), signaling market stabilization after years of oversupply. Industrial demand outpaced supply (3.6M sq ft absorbed vs 3.0M delivered), while office construction has slowed sharply (<2M sq ft under construction vs ~1.8M delivered quarterly in 2021–2023), limiting future supply; however, vacancies remain above the 5–10% “optimal” range and full recovery may take years.

• Airfare: Canada airfares rose 2.9% YoY in March (first increase since June 2024) and ~5% MoM, driven by surging jet fuel costs linked to the Iran war and disruption of the Strait of Hormuz (handles ~20% of global oil). Airlines are passing fuel costs to consumers, reversing nearly two years of declining ticket prices.

• Markets: Canada’s S&P/TSX dipped -11.32 points to 34,144.67, dragged by financials and utilities, while U.S. markets rose (Dow +42.53, S&P 500 +18.45, Nasdaq +75.88). Oil increased $2.00 to $90.13/barrel, and gold edged up $5.70 to $4,829.30/oz. The Canadian dollar strengthened to 72.93 US cents.

• Inflation: Canada’s March inflation rose to 2.4% (+0.6pp), driven by a record 21.2% jump in gasoline prices, while core inflation remained softer with headline at ~2.2% excluding gas. Food inflation slowed to 4% (from 5.4%), and multiple categories saw price declines, signaling weak underlying demand despite energy shocks. Economists expect inflation could exceed 3% in April, but view the spike as largely fuel-driven, with the Bank of Canada likely to hold rates at 2.25% as markets price in >90% probability of no change.

• Politics: The U.S. Customs refund portal launched to return up to $166B in illegally collected tariffs, with 56,497 importers already eligible for ~$127B across 53M shipments and over 330,000 importers affected. Early usage shows minor system glitches but high volume filings (e.g., 500+ files per firm, some $10M claims), with refunds expected in 60–90 days after processing.

Why Discipline Matters in a High Gold Price Market

The stock market and stuff

• Sandwich Chain Jersey Mike’s Files Confidential IPO That Could Top At $12B Valuation (theDeepDive)

• Canada’s March Inflation Heats Up to 2.4% (theDeepDive)

• Oil Climbs on Fresh Tensions in the Persian Gulf (WSJ)

• Tesla Reportedly Avoided U.S. Taxes by Shifting $18 Billion in Profits Offshore (theDeepDive)

• B2Gold Expects Goose Mine Fire To Cost $10 Million In Repairs, Q2 Production Impact Expected (theDeepDive)

In the juniors

• Silver47 Eyes Discovery in Nevada After Tripling Kennedy Project Footprint (theDeepDive)

• Ashley Gold Provides Operations Update for Ongoing Tak Drill Program (JMN)

• Agnico Eagle Bets $3.7 Billion to Sweep Up Finland’s Gold Belt In Mega Deal (theDeepDive)

FULL DISCLOSURE: Power Metallic is a client of Canacom Group, the parent company of The Deep Dive. Canacom Group is currently long the equity of Power Metallic. The author has been compensated to cover Power Metallic on The Deep Dive, with The Deep Dive having full editorial control. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security.