Asks about Strait of Hormuz as linchpin for Brent outlook, noting 10 boats through strait isn't enough and disruption far from over.
Host
Ed Morse
Oil not flowing through strait cannot be replaced; world losing 10-11M barrels/day including petroleum products, fertilizers, aluminum.
Asks about breaking point for oil prices: duration above $100 or getting toward $150.
Host
Ed Morse
No replacement for 300M barrels/month lost; need demand response requiring higher prices each month disruption continues.
Every month of disrupted supply means another month or two or three of incremental high prices; getting through June will mean significantly higher prices through end of year.
Asks what to watch in next 24-36 hours to calm markets: positioning from DC or Iran.
Host
Ed Morse
Critical areas are Tehran and Washington; Trump wants to negotiate but mistrust exists; other risks include Iraq/Iran tensions and potential Kuwait conflict.
Asks how $110 Brent feeds through to pump prices given Trump administration concern about gas prices ahead of midterms.
Host
Ed Morse
Lost 10M barrels/day cannot be replaced; refined product inventories insufficient; product prices growing 60% vs crude 30%; gasoline already $6 in California, $5 elsewhere.