A December surprise after the November midterms is painfully obvious
Tom KirkmanIndependent Project Manager
December surprise, after the November midterms.
This is so obvious, it’s painful to watch it happen.
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With everyone obsessing over UK lettuce and the Fed blowing up the US economy, there was not enough digital ink to discuss the supreme irony of Biden unleashing another release of oil from the Midterm Petroleum Reserve and… oil surging.
Unfortunately for the ever more addled president, this is just the start.
On Wednesday, Amrita Sen, co-founder and research director at consultants Energy Aspects, said on Bloomberg TV that the market risks losing Russian barrels in December as EU restrictions on imports and shipping potentially dissuade tanker owners from moving that country’s crude.
As a result, oil prices “are going to be headed well over $100” going into December while near-term prices are pressured by strikes in France and lockdowns in China that suppress demand.
However, once those wear off, Europe will have to stop importing 1m to 1.5m b/d of Russian crude when embargo on seaborne shipments takes effect in December; those barrels – as Zoltan Pozsar explained all the way back in March and April – will have to be shipped to more distant markets with transport times of 30-50 days vs only 3-4 days to Europe, causing surging costs and substantial delays.
Separately, if shipowners decide that the risk of sanctions is too high to move Russian crude “you will lose some shipping and that will tie up more oil.” …