The oil data site Breughel published on June 15, when the “Iran” MoU was being finalized but not yet signed, a report and charting of the global shortfall of oil obtaining at that late date. Of 107 million bpd consumed globally before the war, 20 million, or 19% of all, had been lost. Then in stages, Saudi and UAE land pipelines, China extra supply, and U.S. exports had been added (the U.S. contribution being significantly the smallest and most difficult of the three), totalling about 6 million bpd. That left 14 million bpd lost to worldwide oil use, or 10%. Comparable loss of LNG.
Then, “Even in the event of a swift reopening of the Strait, the global oil market is expected to remain undersupplied well into 2027 as restarting production facilities and global logistics take several months. Restoring the pre-war supply chain means relocating hundreds of tankers from other trade routes, moving workers and reopening oil fields. Above all, shipping companies and producers must regain confidence in the region’s future stability to restart shipping and production there.” [emphasis added]
This global depression prospect is part of what the Trump Administration saw. The other part: 4-plus% to 6-plus% inflation domestically, and widespread and growing disaffection especially among younger Americans. Whatever bluster the President may be uttering today, “It was the economy, and don’t be stupid!”
