Hi Folks!
I’m new in this sub but actively following the news since the first day of the war. To be honest, I dont belive in Trump because as I see he has made things even worse… I live in Central Europe but no clue what will happen in the short run. Do you think we’ll be facing a huge energy shock?
Posted by Puzzled-Study-856
7 Comments
No one knows. Maybe if we don’t have any alternative to the Gulf countries anymore.
Everything looks primed for a US ground invasion somewhere in Iran. If that happens and Iran follows through on their threats in case of an invasion, we’re in for an energy shock
The shock is already here. Production shut down in many facilities. Oil held up in the straits not to mention LNG. Even if the straits opened tomorrow, we are looking at months to get production back online. Ukraine taking Iran’s playbook and hitting Russian oil, taking portions of that offline. SPR releases and manipulation are artificially masking the true market price of oil currently getting out of the ground. Historically, SPR releases only delay the inevitable. No one can really predict what is going to happen next except that the oil shortfall is here now for a large part of the world along with natural gas. Add fertilizer, etc to that.
You will face significant costs for fuel at the pump and for utility gas use(if relevant, less so in summer).
Europe is not as bad off as Asia but still dependent on those fossil fuels.
But yes, global energy shock is now guaranteed because of how much oil/gas infrastructure has already been damaged, even assuming strait opens, it’s a significant amount and will take time to repair. If the strait doesn’t open up quickly it will get much worse
Food prices are likely to increase as well as the fertilizer is also facing supply issues from the strait closure. And this will potentially have some country specific impacts. Maybe Netherlands for example is insulated because they are a major food exporter but Idk.
New world order. Not good for the US.
Lot of moving parts here so worth separating what we actually know from the speculation. The strait isn’t a total blackout. Some oil is still moving, mainly on Iranian-linked ships, and Asian buyers are already locking in barrels from the US, Latin America, and West Africa.
For Europe specifically, the crude side is actually manageable for now. you’re already pulling barrels from the North Sea, West Africa, and the US. The real problem is refined products. Multiple refineries across the Gulf have been hit (Kuwait, Bahrain, others) and those don’t come back online quickly. The complex processing units take 5-7 months to repair even after the fighting stops. That means diesel and jet fuel stay tight for a while regardless of what happens with the strait.
SPR releases buy time but don’t fix broken refineries. Kpler’s flow data had strait transits at around 20% of normal capacity as of mid-March, with even a best-case full recovery not until July.
Yes