$100/BBL

Is anyone surprised that oil is now over $100.00 a barrel?

It is foreseeable by anyone with 2 brain cells to rub together that bombing Iran and shutting down the Strait of Hormuz would have this effect.

The chairman of oil producer DNO was flying from New York to Oslo early on Feb. 28 when he told staff to turn off the company’s oil wells in Iraq.

America and Israel had just attacked neighboring Iran. Bijan Mossavar-Rahmani wasn’t taking any chances, having weathered a drone strike on the company’s oil fields in Iraqi Kurdistan last summer. By the time he landed, the pumps had stopped—the first oil shutdown of the war.

To the south, another problem was brewing. An apparent recording of an Iranian naval captain telling ships not to enter the Strait of Hormuz spread through industry WhatsApp groups. 

Tanker traffic slowed to a trickle. The doomsday some oil analysts believed could never happen was coming to pass. Unable to ship crude to world markets, much bigger producers in Iraq began to run out of places to put it. The country cut output by more than two-thirds. Tanks in Kuwait were next to fill up. U.S. oil prices vaulted above $100 a barrel Sunday for the first time since the fallout of Russia’s war on Ukraine.

………

On Saturday, the Abu Dhabi National Oil Co. signaled it too was slowing production so tanks didn’t overflow. If the strait is still closed this Friday, daily output in the region could fall by more than four million barrels, Kaneva estimates. The decline could reach around nine million by the end of March, representing almost a 10th of global demand. 

Also note that Trump has done nothing to replenish the US Strategic Oil Reserve.

I am so glad that my Sharon* and I are driving hybrid vehicles with fuel economy in the 50 mpg range.

^*Love of my life, light of the cosmos, she who must be obeyed, my wife.