Asks if investors will have to account for a higher geopolitical premium post-war due to Strait of Hormuz.
Joumanna Bercetche
Paul Gooden
Yes, around 20% of global oil passes through Hormuz. Iran has shown ability to close it. Into the medium term, a bigger geopolitical premium in oil price is likely.
Asks how much worse price shock would be without UAE/Saudi pipelines.
Joumanna Bercetche
Paul Gooden
Pipelines redirect 4-5 mbd, SPR release adds ~3 mbd. Helps mitigate but doesn't solve. Outage is 12-13 mbd after offsets, a >10% deficit. Market balances via demand destruction at $120-150/bbl Brent.
Asks if futures market will catch up to physical.
Joumanna Bercetche
Paul Gooden
Yes. Regional dislocations (Middle East blends at $140-150 vs Brent $100+) will narrow as Atlantic Basin oil-on-water is drawn down. Steep backwardation reflects physical shortage.
Asks how quickly oil prices normalize post-war.
Joumanna Bercetche
Paul Gooden
Ceasefire likely in 3-4 weeks (Iran's position strengthens as inventories draw). Then 3-4 more weeks to get flows back (fields shut, workforce demobilized).