Why oil at $200 a barrel is no longer unthinkable
Financial Times • • general
Key Points:
- The Strait of Hormuz, a critical transit point for a fifth of global oil and liquefied natural gas, remains closed, raising concerns about potential spikes in energy prices depending on the duration of the closure and investor reactions.
- In a worst-case scenario with a prolonged shutdown, up to 20 million barrels per day could be cut from global supply, though rerouting and increased production from other sources might reduce the net loss to around 12 million barrels per day, a figure larger than the demand drop during the pandemic.
- A complete long-term closure is deemed unlikely due to potential US Navy intervention and geopolitical considerations, with global oil stockpiles of about 8 billion barrels providing some buffer against supply shocks.
- A more plausible disruption of
