Ninety One on oil market dynamics and war timeline (with Joumanna Bercetche)

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Ninety One 7.8
Asset Manager $150.00B
Paul Gooden 7.5

Ninety One on oil market dynamics and war timeline (with Joumanna Bercetche)

wti

Brent oil prices, somewhere between $120,250,000, $120,000 a barrel... at that level, consumers start to modify their behavior. This is the price level needed for demand destruction to balance the current ~12-13 mbd physical deficit.

1 calls

+78

consistently strong, high-conviction calls that played out

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.

Cites airlines closing routes and IEA advice as examples of demand destruction starting.
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.

Also interested in medium-term mid-cycle price post-ceasefire, which he believes will move up.
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).

It takes two to tango; Trump is talking to someone, but need to convince majority of Iranian leadership.

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