Apart from the blockade of the Strait of Hormuz, the next biggest thing to happen as a result of the US-Iran war is the sudden announcement of the United Arab Emirates leaving OPEC.
When the Strait opens up again, and the oil is flowing freely, this move will have two effects; the first being to lower oil prices as the UAE will start pumping oil well beyond its current OPEC quota limits. They'll do this to help pay for damage caused by the war. A consequential effect may then be to challenge the viability of two industries, fracking and electric vehicles. The latter will only happen if the price of oil comes down by a lot, which it can do, but it is a wait and see.
Right now though, with the Strait still closed, we have an immediate supply crisis, that remains unchanged.
No comments:
Post a Comment