GS McElligott UPDATE THE STRAW THAT STIRS THE DRINK 15 Sep 2026

Nomura McElligott - UPDATE THE STRAW THAT STIRS THE DRINK 15 Sep 2026 Charlie McElligott · Nomura · Equity Derivatives Sales / Strategy Tue 15 Sep 2026, 1:14pm ET

Brief follow-up, as the "Energy Shortage Shock" is going "live" now (especially since a distribution platform issue preventing some folks from seeing my email this morning), and honestly it feels like Stocks are asleep at the wheel on this one right now...

The Oil market is a hot mess and risking a blast of Rate Vol ("All Assets are Short Rate Vol"), with further "confirmation" of the Diesel / Energy "shortage shock" going "live" via headlines coming a few hours after I sent this morning's piece....especially with fears of a Red Sea shipping issue drying-up Asia flows on top of the previously highlighted "EU" patient-zero, with the punchline being this: the market is increasingly pricing the "Nuclear Option" of a US Export Ban, ripping WTI now...

*SAUDI ARABIA IS INFORMING SOME EUROPEAN OIL REFINERS THAT THEIR SEPTEMBER- LOADING CRUDE CARGOES ARE CANCELLED AFTER EAST-WEST PIPELINE CLOSURE, THREE TRADE SOURCES SAY

Damage to the East-West Pipeline could reduce exports from the port of Yanbu by 2.5 million to 2.7 million b/d, according to Kpler data. The 750-mile pipeline can transport as much as 7 million b/d from Saudi Arabia's eastern oil-producing region to Yanbu, on the Red Sea, providing an alternative to shipments through the Strait of Hormuz. Saudi Arabia is seeking to restore partial operations within days, although damaged pumping stations could take six to eight weeks to fully repair, The Wall Street Journal reported.

Concerns over alternative export routes have been compounded by heightened risks to Red Sea shipping. The Houthis seized Perim Island in the Bab al-Mandeb Strait over the weekend after taking the nearby port of Mokha, according to reports. Saudi crude loadings from Yanbu had already fallen to about 1.1 million b/d in August from more than 4 million b/d in April-June, according to LSEG data. Analysts at Rystad Energy note that Red Sea inventory draws can only cover Yanbu crude exports for two to six days, though drawing on additional storage in Egypt could extend that window by another week.

On Tuesday morning, reports indicated the 400,000 b/d YASREF refinery in Yanbu, a major exporter of diesel to Europe and Asia, was struck by Houthi forces.

An overnight Ukrainian drone strike on Russia's 160,000 b/d Syzran refinery added to supply anxieties.

The "Shortage Shock" now is almost certain to force POTUS' hand on considering the "Nuclear Option," as we are seeing real Delta of "U.S. Export Ban" here as a real "Left-Tail" nuke to the global economy, with WTI going "turbo bid" vs Brent right now...

For those who missed the original note, scroll below...

Quick "Macro Doomsday" -story that isn't tied to AI, lol...

"But IMHO, I think Rates today (Europe especially) were again "Waking Up" to the "Energy / Petrochem Shock 2.0" -situation, realizing the shortages are increasingly "terminal"...where I think most-critically this time versus the "first time around" with the Iran War / SoH, China is no longer emptying their emergency reserves into the shortages....but instead this time around, China is now REBUILDING said Crude inventories, more than likely in coordinated conjunction with Iran to "turn the screws" on the U.S."

Nomura Cross-Asset note, "Vol Is Inflecting" 9/10/26

Bonds, Stocks, Gold, Credit and Crypto all slowly bleeding-out slowly overnight-while US Dollar ("Energy Independence / Sovereignty"), Energy Equities ("The Barbell"), Commodity Carry, Rates Trend and "Long Vol" remain the favored uncorrelated "Hiding Places"-as yet again, Crude Oil / Energy is "The Straw that Stirs the Drink" of the current global macro risk-regime