Brent approaches $100/bbl again, volatility keeps on rising, and Straits open end-April less than eve-odds.
Source: BBC.
So prices are up, as is implied volatility:
Will traffic resume by end-April? It’s a coin-toss…
Brent approaches $100/bbl again, volatility keeps on rising, and Straits open end-April less than eve-odds.
Source: BBC.
So prices are up, as is implied volatility:
Will traffic resume by end-April? It’s a coin-toss…
Markets are not totally freaking out on the hope that TACO Trump will abandon the Iranian people again.
You can TACO on a unilateral tariff, you cannot TACO on a regional war that involves a dozen countries.
Last week I posted a naive question on this blog about the elasticity of crude oil to pump prices. I’m happy to report that I have now been educated on that, and expect that education to continue for the next several weeks, and probably months. According to various internet sources, crude at $125 a barrel would push us past the $5 gallon threshold in most states that are not named California. That would be interesting.
David S: I use Jim Hamilton’s 2.5 cents per $1/bbl rule of thumb. It’s pretty close to more sophisticated pass-through estimates.
We need an option for “partial resumption of traffic”:
https://www.firstpost.com/world/after-jaishankar-araghchi-talks-iran-allows-indian-tankers-through-strait-of-hormuz-report-13988634.html
Iran will now allow Indian cargo vessels, including tankers, to transit Hormuz.
There have been suggestions that ships associated with China and Russia would also be allowed through, but traffic through the Strait so far shows no evidence of that.
Exempting a few giant economies from the blockade would quickly diminish its effect on the world economy, and eventually mostly negate the effect. That would leave Iran committing acts of war against most of the world while conferring only a modest commercial advantage on friends of Iran – a bad deal for Iran. I wonder if there is some quid pro quo between Iran and India not mentioned in this press report.