The Oil Crisis Is About to Get Physical
6 hours ago
- #economic-disruption
- #oil-crisis
- #global-economy
- The Strait of Hormuz disruption has cut off most oil flow, leading to speculative price spikes in futures, but actual deliveries haven't declined yet due to oil already at sea.
- Physical oil shortages are imminent: deliveries to Asia will end this week, to Europe next week, ending the ability to talk down prices.
- Uncertainty stems from how much oil escapes the Gulf via pipelines and Iranian allowances, and the low price elasticity of demand, making precise predictions difficult.
- Scenarios range from low to high disruption (8-16% supply cuts) and varying elasticities, with potential for prices to rise dramatically, possibly to $200/barrel, risking a global economic crisis.
- A General Spending Strike is proposed as a more impactful economic disruption than one-day actions, aiming to leverage consumer spending (70% of economy) to pressure oligarchs and oppose fascist takeover.