Weekend Edition.
The blackest of black swans.
1. Energy Common Sense (by Carolyn Kissane):
What we are now seeing is not simply a war continuing, but a war expanding: geographically, operationally, and economically. Iran’s response has not been confined to a single theater. It has been horizontal, layered across the Gulf, and now extending beyond it. The recent strike on Saudi Arabia’s Prince Sultan Air Base, reportedly wounding 12 American personnel, is one indication of that widening scope. The Houthis’s entrance, launching missiles against Israel and signaling potential escalation in the Red Sea, is another. This is no longer a contained conflict centered on Iran. It is a multi-front disruption with implications that extend well beyond the region…..
Brent closed Friday at $112.57 per barrel, with WTI at $99.64, both sharply higher on the week. But even at these levels, prices are almost certainly underpricing what comes next. Markets are still treating this as a disruption event when it is increasingly a duration event. When trading resumes, prices will have to absorb not just tighter supply, but the realization that shipments expected to arrive in April, the barrels already on the water meant to replenish inventories, are not arriving. This is a shift into structural scarcity. (Source: carolynkissane157206.substack.com)
