Synopsis
A big global energy crisis is happening due to oil supply loss during war. Fuel prices are rising fast in many countries. Inflation is also going up, affecting daily costs. Some regions are facing fuel shortages. Markets are reacting with high volatility. Experts say this situation may impact the global economy and investment trends in the coming months.
ETMarkets.com Oil supply loss The world is facing the biggest energy crisis ever, with around 600 million barrels of oil supply lost from the market. This missing oil is worth about $50 billion and has been removed from global supply during the ongoing Iran War, as per The Kobeissi Letter post on X. Today marks Day 51 of the Iran War, which is the main reason behind this massive disruption. To understand how big this is: this lost oil equals fuel needed to run the entire global shipping industry for 4 months. The situation is being called “unprecedented” because such a large supply shock has never been seen before.
US gas prices rise fast In the US, gas prices have already jumped 47% since December due to the crisis. Inflation in the US is now moving close to 4%, similar to what happened during the 1970s crisis, as per The Kobeissi Letter analysis says. Europe is facing an even worse situation in aviation fuel, where jet fuel prices have surged over 100%. Europe currently has only about 6 weeks of jet fuel left, raising fears of flight cancellations. Governments in Europe are now asking people to work from home to save fuel.
Asia oil supply risk high Asia is hit the hardest because it depends heavily on oil passing through the Strait of Hormuz. Around 45% of Asia’s oil imports come through Hormuz, making it extremely vulnerable. Asia also depends on Hormuz for 30% of gasoline and naphtha imports, as per The Kobeissi Letter. Additionally, 9% of diesel and 5% of jet fuel in Asia comes through the same route. The big question now is how this crisis will affect the global economy in the long run.
US energy inflation keeps going up Energy inflation directly makes up about 7% of US inflation but also affects many other costs indirectly. US energy inflation recently hit an extreme 287% annualized rate. Overall US inflation (CPI) has now reached 3.3%, the highest since February 2024. Models suggest inflation could cross 3.5% as soon as next month. Due to rising prices, consumer confidence is crashing, with the University of Michigan inde
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