The current disruption to Persian Gulf oil flows represents ~16% of global supply, dwarfing every previous crisis over the last 50 years.
This is 18 TIMES larger than the peak hit to Russian oil production during the 2022 invasion of Ukraine.
It also exceeds the 1990 Gulf War (~8% of global supply), the 1980 Iran-Iraq War (~7%), and the 1973 Oil Embargo (~7%).
Unlike previous crises, which were production shocks, the 2026 disruption is an export shock, meaning the oil exists but cannot leave the Persian Gulf.
If Strait of Hormuz flows remain depressed through the end of March, oil prices could break the 2008 and 2022 peaks of ~$147 per barrel.
Even if the conflict de-escalates, prices could remain elevated around $110 per barrel for months.
The scale of the current energy market disruption has no modern precedent.
How much can US + Venezuela production ramp up in the short term?
what I was wondering too... how much strict physical constraints do we have to stop $100+ prices from making North Sea/U.S. oil production work overtime?
Cure for high prices is high prices, etc.
I know there’s a ton of potentially economical oil that isn’t being developed in America but I don’t know how quickly it can come online.
I also read today that the last ships leaving the Gulf for e.g., Europe are arriving about now so until now the squeeze has been price only. Some serious incentive for start locating new supplies gonna start bite soon -- unless, which I suspect, there are stockpiles + reserves floating about (literally!)
Do you get some sort of oil-state dividend? Might be a big year
me?? Nooo, I lowly pleb. Maybe the Norwegians are having better luck
Oil is already under $100 no?