The Physical Oil Squeeze Eases for Now as Buyers Back Away

The cost of a real-world oil cargo is dropping fast as buyers back away, in a dramatic reversal from last month’s bidding frenzy despite the ongoing closure of the Strait of Hormuz.

The sharp retreat provides a counterintuitive backdrop to warnings that the oil market is barreling toward a crisis point — possibly in a matter of weeks. Still, traders cautioned that the calm may be shortlived, raising the risk that physical prices soar again as the industry relies on stopgap measures that can’t fill the gap indefinitely.