Oil market seems complacent despite Trump's de-escalation comments; Strait of Hormuz closure is critical.
Haslinda
Fereidun Fesharaki
Markets move on sentiment, but physical reality is 100 million barrels per week not flowing through Strait of Hormuz.
Losses to market will be astronomical if this continues.
Fereidun Fesharaki
If closure continues 6-8 weeks, prices will go through the roof to $150-$200+ oil, impacting global economy.
IEA release in April won't be enough; market will choke.
Current oil prices not reflecting the risk.
Haslinda
Fereidun Fesharaki
Immediate oil is $10-$15 more expensive than futures; backwardation shows tight physical availability.
Problem becomes bigger weeks down the road.
How should Asian importers like Japan, India, Korea look at supplies?
Haslinda
Fereidun Fesharaki
Asian countries showing no backbone; Strait closure is everyone's problem requiring collective action.
Within 2 months there will be gasoline rationing even in Singapore.
Fereidun Fesharaki
Reversal of current supply disruption will take months due to shutdowns.
Global disaster unless regime in Iran changes.
Fereidun Fesharaki
Gas market hit harder than oil with no policing mechanism.
Critical for Asian markets.
Fereidun Fesharaki
Absolutely; gas market has no policeman; critical for Asian markets more than Europe.
What are we looking at for oil market in coming weeks?
Haslinda
Fereidun Fesharaki
Reversal will take months; people shutting down capacity; bringing back online takes time.
Environment where everyone needs to see regime in Iran change; if not, global disaster.