Extraordinary.
But not miraculous.
1. The Trump administration’s public portrayal of a shattered Iranian military is sharply at odds with what U.S. intelligence agencies are telling policymakers behind closed doors, according to classified assessments from early this month that show Iran has regained access to most of its missile sites, launchers and underground facilities. Most alarming to some senior officials is evidence that Iran has restored operational access to 30 of the 33 missile sites it maintains along the Strait of Hormuz, which could threaten American warships and oil tankers transiting the narrow waterway. People with knowledge of the assessments said they show — to varying degrees, depending on the level of damage incurred at the different sites — that the Iranians can use mobile launchers that are inside the sites to move missiles to other locations. In some cases they can launch missiles directly from launchpads that are part of the facilities. Only three of the missile sites along the strait remain totally inaccessible, according to the assessments. (Source: nytimes.com)
2. Javier Blas:
Facing an unprecedented shortage, the global oil market has called on the US, the world’s top producer, for help. And thanks to the shale revolution, America has been able to respond: Over the last four weeks, US net exports of crude and refined products have averaged a record high of 5.9 million barrels a day, up from 3.3 million a year ago. Only a decade ago, the US was a net importer in excess of 5 million.
Can the US sustain that level of net exports forever? No — the American shale revolution is extraordinary, but not miraculous. The question, however, isn’t whether the nation can keep up with no end in sight; instead, it’s whether it can do it for long enough to keep oil prices from exploding before it reaches a deal with Iran. Looked through that lens, the US has the ammunition, thanks to its emergency stockpile, to sustain its outsized oil exports for several more weeks, perhaps even a couple of months….
On balance, Trump probably has the rest of May and probably into June before the combination of the shrinking SPR and growing pressure on the commercial inventory start to stir up market anxiety. That’s probably enough time for the White House find an exit to its quagmire in Iran. Still, the clock is ticking: America is sustaining an enormous flow of oil using a stockpile. (Source: bloomberg.com)
3. Global oil inventories are plummeting at a record pace with the ongoing disruptions caused by the Iran war threatening further price spikes, the International Energy Agency warned on Wednesday. Stockpiles of crude oil and refined fuel declined at a rate of almost 4 million barrels a day in April — the equivalent of more than the UK and Germany’s consumption combined — threatening to erode the buffer countries rely on to weather supply shocks. “The world is drawing oil inventories at a record pace as importing countries confront disruptions to Middle Eastern supplies,” the IEA said in its closely watched monthly report. “Rapidly shrinking buffers amid continued disruptions may herald future price spikes ahead.” (Source: ft.com)
4. (The) Iran war is ripping across the US economy at a cost of hundreds of billions of dollars in lost output, as soaring fuel prices, rising borrowing costs and supply chain snags erode Americans’ prosperity. While early estimates by the Trump administration have put the direct price tag to US taxpayers at $29 billion, economists foresee a far larger toll once the full military bill and higher financing costs are considered. “The budgetary costs that have been announced are really just the tip of the iceberg,” said Linda Bilmes, a Harvard professor and expert on the cost of US conflicts. “It might not be felt immediately — you can patch something up for a while. But the scale of this financially is such that you can’t cover it up forever.” The conflict comes at a time when Trump’s popularity is already near record lows, fueled in part by a worsening cost-of-living crisis that has left many Americans struggling to make ends meet. (Source: ft.com)
5. Consumer prices rose 3.8% in April from a year earlier, a clear impact of higher gas prices since the start of the war with Iran. The figures, reported yesterday by the Labor Department, surpassed the previous month’s reported increase of 3.3%. The April increase was the highest in three years. Prices excluding food and energy categories—the so-called core measure economists watch in an effort to better capture inflation’s underlying trend—rose 2.8%, a pickup from 2.6% the previous month. High and rising prices have become a flashpoint for Americans, who had expected the steep inflation that hit the U.S. right after the pandemic to be off their plates by now. Price increases have been especially sharp for some items that people buy all the time, like coffee and gas. (Source: wsj.com)
