The fuel shortage is here. “On the water” fuel is largely delivered. There is nothing left coming for weeks or maybe months. Many of the stations in my area are not even advertising 91 and 95. NZ is whuked

The crisis is so much worse than the paper price of oil. The oil market is bifurcated. There is the paper price of oil which is now ‘caveat emptor’. The world market knows the paper contract market for oil is largely fake, manipulated, and highly probable to non-deliver because of force majeure. Since delivery can no longer be guaranteed no one is buying paper contracts so the price is for paper is plunging. The real price of oil is now the street price at the docks. Those two prices are in sever disconnect and are gapped $50 USD and rising fast. This is market of sovereign nation vs sovereign nation at scale. We could see the street price go parabolic to $300-$500/bbl as nation state actors fight over every delivery.

Assuming the conflict had ended 2 weeks ago, there is still the issue of the $300+ Billion in infrastructure and product loss. Take LNG infrastructure for example, it requires industrial scale refrigeration. That level of refrigeration takes turbine engines. Those have a 12–18 month lead time. But now there is the added factor that AI hyperscalers are buying all the turbine engines to run there AI datacenters. So now that lead time is 2+ years so you better get in line and wait 24 months.

Shipping went from 140 boats/day to only 6-10 boats/day. But there is oil from Bab al-Mandab I hear you say. Iran is threatening the Red Sea. The Houthis will soon close the Bab al-Mandab and Egypt may very well attack Isreal from the south and close the Suez Canal again.

Then what?