We know what’s coming and we are prepared.
🛢 The Strait of Hormuz Oil Shock Is About to Head to the West
The biggest oil supply shock in history has reached the one-month mark. Prices have surged, growth forecasts are being cut worldwide, and shortages are emerging across Asia, from Thailand to Pakistan.
But the energy industry is warning that the crisis is only beginning.
In conversations with more than three dozen oil and gas traders, executives, brokers, shippers and advisers over the last week, one message was repeated over and over: The world still hasn’t grasped the severity of the situation. Many drew parallels with the 1970s oil shock, warning the closure of the Strait of Hormuz is threatening an even bigger crisis. Fuel crunches hitting Asia will soon start spreading west, they said. Europe is likely to face surging prices to secure cargoes and is at risk of diesel shortages in the coming weeks.
If the strait stays closed, the world will have to significantly reduce its oil and gas consumption — but not before prices spike to a level that forces consumers and businesses to fly, drive and spend much less. Already, demand has begun to drop, and some countries in Asia are hoarding and rationing fuel. US government officials and Wall Street analysts are starting to consider the prospect that oil prices might surge to an unprecedented $200 a barrel.
“It’s clear to me if this crisis lasts more than three or four months it becomes a systemic problem for the world,” Patrick Pouyanne, chief executive officer of TotalEnergies SE said at the CERAWeek conference in Houston. “We cannot have 20% of the crude oil, which is exported globally, stranded in the Gulf and 20% of the LNG capacity stranded, without any consequence.”
A simple back-of-the-envelope calculation suggests the closure of the strait is reducing global oil flows by some 11 million barrels a day, after accounting for the interventions so far aimed at offsetting the loss. When compared with pre-war demand levels, that leaves a roughly 9 million-barrel shortfall — a yawning gap that is more than the oil consumption of the UK, France, Germany, Spain and Italy combined. Lower demand, particularly in Asia, is already helping to force a closing of that gap. (The market also entered the war in a surplus.)
But for supply this may be as good as it gets. A massive emergency stockpile release and US waivers on Russian and Iranian oil sanctions have bought some time, but they are finite interventions. Once they’re exhausted, it’s not clear what further tools President Donald Trump has to keep global oil prices from surging in the near term – other than fully reopening the strait. Iran has been allowing a trickle of foreign ships to pass through the waterway, but the numbers so far do little to move the needle.
But it’s not just fuel: petroleum is used to make plastics, which are used in just about everything.
Looking more broadly, with oil around $110 a barrel, Bloomberg Economics SHOK model projects a marked but manageable boost to prices and blow to growth. In the euro area, those numbers are about 1 percentage point on annual inflation and 0.6% off GDP.
But if the Strait of Hormuz stays closed too far into the second quarter, the risk is that oil prices move sharply higher. At $170 a barrel, the impact on inflation and growth roughly doubles — a stagflationary shock that could shift everything from the path ahead for central banks to the outcome of the US midterm elections.
The Phantom MK1 is the first US humanoid robot built explicitly for combat.
$150k per unit. Ballistic armor.
Stealth coating that hides it from thermal sensors.
Can carry 20kg of weapons or equipment.
Reports claim two units are already being tested on the frontlines in Ukraine.
War is about to look very different...
🄳🄾🄾🄼🄿🤖🅂🅃🄸🄽🄶
In a research note published Thursday, Goldman economist Pierfrancesco Mei laid out a detailed framework for how higher energy prices translate into labor market pain — and the picture isn’t pretty. As explained by the bank earlier in the week, its commodities strategists expect Brent crude to average $105 in March, spike to $115 in April, and then gradually retreat to $80 in the fourth quarter, assuming flows through the Strait of Hormuz remain severely disrupted for roughly six weeks. In an adverse scenario — one where the conflict deepens — Brent could peak as high as $140 a barrel, or $160 in a “severely adverse” scenario.
The damage isn’t distributed evenly. Goldman’s sector-level analysis points to leisure and hospitality as the single hardest-hit industry, accounting for roughly 5,000 lost jobs per month, with retail trade shedding another 2,000. The logic is straightforward: when energy prices surge, consumers cut back on discretionary spending first — skipping ...
We are on the brink of breaking the backbone of Australia.
Right now this country has around 26 days of diesel left in reserve. We have 28,000 unfilled truck driver positions.
Nearly half the current driver workforce is over 55 years old. The next generation is not coming through.
The web that holds this nation together is fraying thread by thread and most Australians have no idea.
So let me walk you through what happens when trucks stop.
🔴 DAY 1 to 3
Supermarket shelves begin to empty. Supermarkets carry roughly 10 days of dry goods and about 7 days of frozen and fresh. Panic buying cuts that in half overnight.
We saw it with COVID. We see it right now with the fuel panic already hitting regional stations across the country.
🔴 WEEK 1
Fresh produce gone. Meat gone. Dairy gone. Hospitals burn through their 3 day medication buffer.
Fuel stations in regional and remote areas run dry first. Communities like those along the Perth to Alice Springs corridor get cut off. No fuel in means no food out.
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⚡️ - Some of my observations, now that nearly a month of this (4 day) war has passed:
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Israel's interceptor arsenal, except the Iron Dome, has hit a critical stage more than a week ago. It's "Arrow-II/III" inventory is nearly completely depleted; thus the chance of impacts increased exponentially.
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The degradation of CENTCOM radars has been apparent since the very start of the conflict, after Iranian strikes. To compensate, the USAF has been conducting more AWACS sorties, including "E-3B Sentry", "E-2 Hawkeye" AEW and "U-2".
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Israel expended a large % of it's stand-off munitions in this campaign, nearly half. This would not be the case if their use was not necessary.
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The IAF and the USAF are capable of entering deep into Iranian airspace due to established air-corridors made possible through Iran's mountainous terrain, which also makes Iranian IADS coverage limited. This is paired with the US Navy's TLAM strikes targeting these installations, alongside USAF HARM strikes & EW jamming ...
