6.8 billion barrels — this is the figure that’s catching my attention right now.
According to JPMorgan, if the Strait of Hormuz continues to remain closed, global oil reserves could reach their operating minimum as early as this month.
And then the issue won’t be how high the oil price might rise.
Below that level, problems may begin with maintaining pressure in pipelines and with refining operations.
This is a fundamentally different type of risk.
It’s not that oil has become expensive
It’s that “physical oil is starting to run short.”
If this assessment plays out, the market will face a situation that the modern oil system is practically unaccustomed to seeing.
Hormuz matters more than another move in the price.
$CL $BZ
According to JPMorgan, if the Strait of Hormuz continues to remain closed, global oil reserves could reach their operating minimum as early as this month.
And then the issue won’t be how high the oil price might rise.
Below that level, problems may begin with maintaining pressure in pipelines and with refining operations.
This is a fundamentally different type of risk.
It’s not that oil has become expensive
It’s that “physical oil is starting to run short.”
If this assessment plays out, the market will face a situation that the modern oil system is practically unaccustomed to seeing.
Hormuz matters more than another move in the price.
$CL $BZ
