How high could the oil price go? | The Economist
The price of oil has shot up past $126 dollars a barrel, its highest level since 2022. After months of shrugging off concern, markets are finally starting to reflect that the Strait of Hormuz might remain closed, taking about a seventh of the worldโs oil supply offline. The Economistโs editor-in-chief, Zanny Minton Beddoes, Edward Carr, deputy editor, and a panel of experts discuss how high the oil price could really go.
#oil #iran #straitofhormuz #economy #finance
00:00 – How high does the oil price need to go to balance supply and demand?
00:50 – Why has the oil price surged?
01:28 – Are traders in la la land?
03:12 – What has stopped the price from rising?
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40 Comments
Hi
Only 20% supply affected, the price increased 100% ๐ it is scam
I have a crush on Zanny Minton Beddoes and Anne Applebaum of The Atlantic. I'm not sure what this means.
The real story isn't just the price per barrel, but the 'demand destruction' threshold. Weโve seen this movie beforeโonce oil crosses that $110-120 mark, the global economy starts tapping the brakes. The question isn't how high it can go, but how long it can stay there before a recession forced by energy costs brings it crashing down again.
This is not Gulf. This is the Persian Gulf. Correct yourself.
One key factor that is overlooked is that global oil demand was only growing at .6% a year before the strait was closed. At a time when spare capacity is at a record 7%. In 1973 global oil demand was growing at 7% a year and spare capacity was at 1%. The traders on the global oil market understand the actual numbers the talking heads are way, way off the mark.
I also think something most of the world doesnโt understand is that the disruption of oil hadnโt really reached the end market yet. It takes weeks for ships to reach their destinations from the Gulf, so the rise in prices was all about future supply. Now weโre reaching the point where the markets are going to see less oil arriving and the reserves that have been released will be quickly used up. So from now on unless reserves are released in larger quantities the price is going to rise until it slows demand or the strait opens.
We aren't in a totally crazy world. The world and the Pentagon have been planning for a closed strait for fifty years. Massive reserves, bypass pipelines, and diversified supplies all ensure that there is no crisis from a closed strait.
The US president doesnโt know what to do about a war he started and said oil prices could be high at least until the midterms. His next priority will be riding around the golf course tomorrow and has no concern whatsoever about what average Americans are going through.
All of this fear mongering and hand wringing over a 4% shortfall? Hello, the world can easily get by with 96% of normal oil supply without causing a crisis. Why would anyone believe otherwise?
Zanny acting like her support of Israel had no influence on this. Israel bombed Iran and kicked this whole thing off. The economist full throated pro-Israel bias hasnโt helped.
To the tune of the chacha slide: could they go up high? all the way to the sky? Are we all gonna die?
Some genius commented! โNo crisis?โ
You blind, bro? Or dense? Or paid troll trying to sway public opinion in the comments box.
There are slight mitigating factors, such as you mentioned, but are insignificant to the total effects of a blocked strait.
Oil ainโt the only resource not passing through.
Aluminum and fertilizer, just two.
I encourage you to reevaluate your position.
This is basically what Chris Martenson is saying – getting towards $200-$300 a barrel to balance out supply and demand. This coming by the fall.
We're sick and tired of hearing trumpeys cheap "deal". You don't make a " deal" between something so important between countries. None of this would be happening if trumpy hadn't started bombing iran.
Very wise not to make a forecast of oil price given the Economist's demonstrated inability to forecast anything.
Alfin llega alguien a ablar algo interesante jijiji el trage es gris o blanco e mel.cholt. o jit vamos aka de olograma.jajaja chaรญto…..
Basing ANYTHING on Donald Trump is like basing things on your cat or dog; You really never have a 100% what they'll do or why they'll do it.
Because Americans elected and incompetent and ignorant president the whole world is suffering and being dragged down. Every country should seek compensation from America
When will Fischer & Tropsch enter the scene?
buy xle, dbc
Thanks Israel :(((
demand destruction is a pipe dream
I'm looking at $150 to $170 eventually.
Storm in a teacup.
There wonโt be as long as the guy in office is still there, itโs been a full year of this and he does not want peace ๐
This ends in famine and Iran has no right to hold the world hostage.
NATO must act immediately or millions will starve.
The paper traders are manipulating the price in the same way the gold and silver price is being held down.
These numbers of reduced barrels don't do the crises justice. About half the global oil is used in the counties of origin, and it's not able to be sold on the international markets due to geography and lack of infrastructure. So the reduction in saleable oil on the international markets is a much larger fraction.
Ask the oil traders? They are the ones causing it
Trump. The war is over. Iran. The Straits will remain closed.
trump leaves office on JAN 20 2029 with crude at $225
๋ฏธ๊ตญ์ฐ ์์ ๊ณต๊ธ๋์ด ๋น ๋ฅด๊ฒ ์ฆ๊ฐํ ๊ฒ๋๋ค. ๊ทธ๋์ ๋ง๋ฅ ์ ๊ฐ๊ฐ ์ค๋ฅด๊ธฐ๋ง ํ์ง๋ ์์ ๊ฒ๋๋ค.
ํ๊ตญ์์๋ ์ผ๋ถ ์์ ํํ ๊ณต์ฅ์ด ๊ฐ๋์ ์ค์งํ๊ธฐ๋ ํ๋ฉด์ ์์ ์ ์์ ์์๊ฐ ์ค์ด ๋ค๊ธฐ ์์ํ๊ธฐ๋ ํด์ ์ผ์ ์๊ฐํ์๋ ๊ฐ๊ฒฉ์ด ์์ ๋ ๊ฒ๋๋ค. ๋์ ๊ฒฝ๊ธฐ ์นจ์ฒด, ๊ณ ์ฉ ์ ํ๋ ํผํ ์ ์์ง ์์๊น ์ถ์ต๋๋ค.
As long as he stays in office it will only get worse and worse. Even more so if he starts really losing as sociopaths get really destructive if they lose.
What revisions will the 2026 Economist Democracy Index have in store as to the state of the United States. Will they support the Global Command economy and leave the US unchanged? Me thinks they kowtow to the Paedo in Chief.
When the price of oil becomes exorbitantly high our European friends can replace the expensive oil by dropping their trousers and lighting their farts. Problem solved.
MASSIVE UNEMPLOYMENT AHEAD. PREPARE ACCORDINGLY.
PLEASE BE SURE to buy your "trump, I did this" stickers – and place them on your local pumps….
Oh yeah… I can totally see reasonable entities like Israel, Iran, and Donald Trump working something out quickly. Makes sense to price in lower oil because of the level headedness of all involved. I'm actually surprised it isn't at $70 by this point considering Israel's storied history of being a peaceful actor who would never take irrational, illegal military actions; Iran's wonderful track record of not over reacting in response to outside forces trying to wrestle the grip of power from the IRGC; and America's role as a beacon of freedom whose defense and oil industries totally don't benefit from a forever war that also has competent, measured leadership who are totally not the type to write 200 word tweets at 3 in the morning because of a joke a late night host made. /sarc
What a fancy way to reveal absolutely nothing of interest. I guess the useful information is behind a paywall.