If you follow geopolitics and the oil market (and really, you can’t follow the latter without following the former) you might be wondering whether the tragedy that took place in Paris last Friday may be enough to override the fundamentals for a while. 

That is, if ever there were a catalyst that had a chance of bringing about a sustained rally in crude, surely the prospect of World War III starting in the Middle East is it. 

Well, before you get any ideas about BTFD-ing via some nightmare of a triple leveraged crude ETF, you might want to consider that no matter how close we get to a global conflict in Syria, the world is simply awash in black gold and with more Iranian supply set to come online starting as early as Q1, the fundamental picture will likely overshadow all other concerns.

Or at least that’s Citi’s take. 

“The Paris tragedy may warrant some uptick in geopolitical premia but this is likely trumped by near-term negative impacts on European air travel and/or economic blowback, adding further weight to the market,” Chris Main writes, in a note out Tuesday. 

As Main goes on to note, there simply isn’t much on-land storage left and once the Iranians are up and running at full capacity, the “problem” will only get worse. Consider the following:

On-land storage is getting increasingly full, with Citi estimating around 47-m bbls of available ex-US commercial storage left.

Oil in “quasi-storage”, which is oil on the water that is yet to be delivered but has not been earmarked for floating storage, is on the rise at ~100-m bbls of combined crude and oil products.

 

Up-to-date observed stock data and capacities have always been hard to come by, but our best estimations put available crude storage in Europe, Japan, South Korea, China and Saldanha Bay at 46-m bbls. Table 2 shows the availability and current levels of crude in-tank by region. Europe, Japan and South Korea are benchmarked vs. previous maximums, which given refinery closures may even estimate on the high-side. 

 

The overhang of WAF barrels and current levels of crude on the water mean on-land storage getting full in 1H’16, particularly if Iranian barrels come back earlier in the year. 

In short: "The US is the last place with significant onshore crude storage space left." 

Which leads directly to Citi's conclusion: "'Sell the rally' near-term as fundamentals remain very sloppy and inventory constraints are becoming increasingly more binding."