The Economist (May 12)
“Ten weeks into the Iran war, the great oil-market mystery is deepening. Every day the Strait of Hormuz remains closed, nearly 14m barrels of oil—14% of global output—are lost.” Yet somehow Brent crude is priced at “just $107 a barrel,” far lower than expected. “Petro-powers [especially the U.S.] outside the Gulf have turbocharged exports.” Inventories and strategic reserves [especially China’s] are being tapped liberally. “During the four weeks to May 10th the big oil-buying regions imported 11m b/d less petroleum” than a year prior. “America and China have bought the world time. It still faces a reckoning if Hormuz stays shut.”
Tags: $107, 14m b/d, Brent crude, China, Closed, Exports, Global output, Gulf, Inventories, Iran war, Mystery, Oil market, Petro-powers, Strait of Hormuz, Strategic reserves, Ten weeks, U.S.
MarketWatch (May 12)
“The most expensive part of the Iran war may not be the oil prices themselves. It may be uncertainty. Markets can absorb expensive energy; businesses can adapt to higher fuel costs if those costs remain stable and predictable. What becomes far more damaging is an environment in which prices swing violently, geopolitical risks shift by the hour and corporate decision-makers lose visibility over what comes next.”
Tags: Adapt, Businesses, Decision-makers, Energy, Environment, Expensive, Fuel costs, Geopolitical risks, Iran war, Markets, Oil prices, Predictable, Prices, Shift, Stable, Uncertainty
