Ellen Wald on Oil, Geopolitics, and the Strait of Hormuz (with Tom Keene, Paul Sweeney)

Ellen Wald argues the Sunni-Shia split is becoming less politically important. Gulf states feel abandoned by the US on Strait of Hormuz security and may build pipelines to bypass it. Oil flows will not return to normal; a more expensive 'ferry service' model is emerging. China's demand is uncertain, which could lead to a glut if it doesn't return.

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Atlantic Council 6.0
Policy Institute
Ellen Wald 6.5

Ellen Wald on Oil, Geopolitics, and the Strait of Hormuz (with Tom Keene, Paul Sweeney)

wti

Oil at $50 is possible if China's demand doesn't return; the new normal for Gulf oil flows is more expensive and slower, but demand uncertainty is the key factor.

Ellen Wald

The Sunni-Shia split is becoming politically less important; Iran supports Hamas (a Sunni group), showing mixed alliances.

The UAE is traditionally close to Iran and Persia despite being Sunni.
Ellen Wald

Gulf states feel abandoned by the US on Strait of Hormuz security; they may build pipelines to bypass it.

If the US gives in on tolls or passage fees, it signals the US is not a reliable partner.
Ellen Wald

Oil will not return to normal flows; a 'ferry service' model will emerge, making the process more expensive and slower.

Fewer tankers are coming back into the Gulf; oil will be ferried out to tankers waiting outside.
Ellen Wald

China's demand has not returned to previous levels; if it doesn't, we could see a big oil glut.

The world is used to China buying an extra 4-5 million barrels per day.

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