CITIC Securities research note said markets underappreciate near- and mid-term upside risk to oil. Near term, the Strait of Hormuz has been closed for weeks and more wells have been forced offline; prolonged outages risk permanent capacity loss. Over the medium term, low capex has pushed US drilled‑but‑uncompleted inventories and new drilling to multi‑year lows, making sustained US high output unlikely and shifting residual supply and pricing power toward Middle East producers. Markets were over

CITIC Securities research note said markets underappreciate near- and mid-term upside risk to oil. Near term, the Strait of Hormuz has been closed for weeks and more wells have been forced offline; prolonged outages risk permanent capacity loss. Over the medium term, low capex has pushed US drilled‑but‑uncompleted inventories and new drilling to multi‑year lows, making sustained US high output unlikely and shifting residual supply and pricing power toward Middle East producers. Markets were overly optimistic on a quick end to the Middle East conflict; forward oil is being repriced higher and potential upside to inflation merits monitoring.