The Billion Barrel Cost of a Longer Iran War
The total volume of unproduced Gulf barrels is set to rise above one billion barrels over full shock duration; lost production in April alone will absorb nearly the entire IEA-coordinated SPR release.
🎙️ On the latest episode of the Oil Ground Up podcast, I spoke with Eurasia Group’s Gregory Brew about Trump killing the Carter Doctrine as well as how to think about the political contours of the Iran War on all sides of the conflict and how they will ultimately constrain our path forward.
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Last night, President Trump addressed the American people, and the world, to provide an update on the status and direction of the Iran War. While we didn’t learn anything new from the speech, Trump reaffirmed many rumours and previously-messaged talking points, and—unfortunately for the global economy—positioned us squarely down the path of a longer war that will continue driving oil prices higher.
We once again heard that the US is two to three weeks away from accomplishing all of its military goals—despite near-constant messaging through early March that the Iran war was only a week or two away from completion. Trump reiterated his belief that the US was roundly winning the war and that any energy price pain was a temporary but necessary cost. Trump also again stressed that the job of reopening the Strait of Hormuz will fall to those European and Asian countries that import their fuels from the Middle East, saying that “Those countries [should] grab it and take it and cherish it.”
What does that mean for the near-term oil market outlook? Let’s review.