Asks for the energy market reaction to recent events and the potential for the US to cut off oil exports to create a domestic pricing structure.
Speaker1
Kevin Book
The global oil price implications of a Strait closure affect all markets, regardless of where the physical barrels are headed. The administration is currently not planning to block exports, focusing instead on supply-side measures.
Kevin Book
If the situation persists for months, modeling based on extrapolating the current crude price trend and demand elasticities suggests a potential price range reaching $174 per barrel.
Asks about trader sentiment and the potential duration of the crisis, given new developments like the threat of ground troops and a closure lasting weeks or months.
Speaker1
Kevin Book
The crisis is already not 'short.' Even if conflict ended today, restarting shuttered facilities takes time—the IEA cites up to six months for graceful shutdowns—meaning supply disruption lasts weeks to months minimum.
Asks what prolonged crude shut-ins mean for gasoline prices and what additional policy tools the White House has beyond SPR releases and Jones Act waivers.
Speaker1
Kevin Book
As prices rise, interventions intensify. While explicit price control authority may not be clear, the President could attempt to use inherent Article II wartime powers.