The “new order” in energy:

  • US, Japan, and Europe who say no to Russian oil
  • China, India, Turkey, Vietnam, and third world countries— we’ll buy Russian oil as long as it is cheap
  • Arab countries — we’ll pick up market share

“The new order promises to make the energy trade less efficient and more expensive, potentially putting commodities at the center of the next global economic crisis” former Treasury official — Zoltan Pozsar.

So, oil is no longer freely traded — hence it will be more expensive/less efficient to transport. (Think of the costs of shipping by pipeline from Russia vs. an oil tanker from Saudi Arabia).

The world in 2022 and beyond will look a lot different than this:


In the short term, OPEC+ has agreed to boost output by ~650,000 barrels/day for July and August. That is ~0.6% of the daily consumption. That is ~0.6% of the daily consumption. Seems good on paper, but the assumption is Russia will pump another 170,000 barrels which are unlikely.

Next week… how the US is holding back production.

oil prices 23 week
Future delivery prices are an indication of the direction the market may go. They specifically exclude all taxes.