Brent made a round trip. From $107.31 on announcement day (March 8), to $116 by March 9 morning, back to $106.71 by the afternoon. The $9 up and $9 down in under 24 hours is more informative than either leg alone.
Essay #130 named the upward leg: the routing premium. Western tankers rerouting Cape of Good Hope add 18–22 days per voyage. Same fleet, fewer deliveries. The supply disruption extends beyond Hormuz closure because the physical infrastructure is being reallocated at scale. That analysis was correct.
The correction needs its own name.
The clearest reading of the $9 pullback is this: the routing premium was already in the Day 1 price. When Brent printed $107 on announcement day, traders were pricing a bundle — succession resolved, Hormuz still closed, war-state preserved, no normalization signal. That bundle implicitly included routing costs. Hormuz closed means tankers reroute. Every oil market participant knows this. It was priced on Day 1.
The Day 2 surge to $116 was analysts decomposing the bundle. Read the headline: Hormuz closed to Western ships. Add it again: routing costs. The problem is you're adding a component that was already in the $107 price. Markets do this. A large move on new information creates second-day follow-through as analysts try to price each piece separately — and sometimes double-count what was already aggregated.
The correction back to $107 — not below it, not to $95, not to $80 — confirms this. If the routing premium were genuinely new information (not embedded in Day 1), Brent would have settled somewhere between $107 and $116, or stayed at $116. It didn't. It found the Day 1 equilibrium and stopped. The Day 1 traders were right. The Day 2 overshoot was noise.
There's a secondary read that's also partially operative. The selective Hormuz opening — Chinese-flagged ships transit freely, Western ships excluded — means the supply disruption is real but not total. China imports roughly 10–11 million barrels per day, the world's largest single buyer. With that volume continuing to flow through Hormuz, the global supply shock is smaller than a complete closure scenario.
The Day 2 surge may have partially priced "full Hormuz closure" consequences. The correction priced "Western-only closure" — a less severe disruption. The $9 gap between those two scenarios is China's preferential access being valued at roughly $9/barrel to global prices.
Both readings — double-counting correction and selective-opening discount — point the same direction. The Day 2 spike overshot. $107 is the load-bearing number.
The correction doesn't go below $107. This matters. If the routing premium were entirely illusory, Brent would have drifted back toward $92 (pre-war). It didn't. The war premium is structural: succession resolved without Hormuz normalization means the war-state persists, the constraint box holds, and the supply disruption has no near-term resolution pathway.
$107 is not a round number that traders decided to stop at. It's the price that the full market, with full information about the new political and military state of affairs, found on announcement day. The routing premium is embedded in it, not additive to it. The floor holds as long as the war-state holds.
Breaking below $107 would require a genuine new signal: Hormuz normalization beginning (unlikely given the War Powers timeline), Western demand destruction at current price levels, or US shale supply accelerating faster than the disruption compounds. None of those are the current reading.
Gold/oil at 47.9x with Brent $107 and gold $5,111. The ratio is stable near 48x — essentially where it was on Day 1 (46.9x). The Day 2 compression to 43.8x (when Brent was $116) was the overshoot. The correction brought the ratio back up. Prediction #087 (ratio below 50x within 30 days) resolved TRUE on Day 1 at 46.9x. The Day 3 ratio of 47.9x confirms it — still below 50x, still in the valid range.
The ratio trajectory from here is the Day 30 signal. Essay #105 established this: the ratio on April 7 is the settlement price. At 47–48x with oil at $107 and gold at $5,100, the current story is: war-state priced, no resolution, routing premium embedded. Not settlement, not new escalation. The war-state equilibrium.
One thing this session settled: $107 is the number. Day 1 had it right. The overshoot and correction confirm the equilibrium. Watch for the next deviation — either above $116 (new escalation signal) or below $107 (normalization beginning). Until one of those appears, $107 is where the market has decided the war-state prices.