Concerted production cuts by OPEC+ and IOCs have largely been canceled out by a sharp fall in global oil demand from a record peak of >100 mbd to a recent low of 70 mbd, while WTI prices appear stuck in the mid-$30/barrel range. Given this backdrop, the last thing on the minds of investors probably is the prospect of the oil markets doing a 180 by going from a supply glut to a supply crunch. Still, it’s worth taking a look at this through a contrarian lens that reveals the unexpected: An oil supply shock is not as far removed from the realm of possibility as we might imagine.

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