Originally Posted by
LonesomeSky
Today, Oil prices are up after Trump shot down Iran’s latest offer. The SoH has been closed since late February with no signs of a resolution anytime soon. Also, it appears that the US military is unable to open the Strait without investing significantly more assets or landing troops on Iranian soil.
The US economy remains strong. Over the past week, the Iran story has managed to sink below headline level for several days. Meanwhile, in Iran, there are no signs of instability. Their economy is in shambles but Iran is used to this. They fought a long war with Iraq as well as withstanding decades of economic sanctions. Iran has a strong secret police force, an unarmed populace, and a core of true believers in the revolution. That government has staying power.
Are we in a stalemate?
.
Europe and Asia will resort to jet fuel rationing here in just a few weeks. Tankers are already filling up on US crude and exporting it overseas. Jet fuel shortages are going to hit the west coast shortly thereafter (CA is at it's lowest quantity on hand since 2003). A CIA source quoted a report saying Iran can last in their present predicament for at least the next four months.
The SPR drawdown will end in July.
If the war ends before July, we'll be OK. We've got a few months to see how it plays out. But I don't see Iran moving off their position at all. Why would they? They have the least to lose and most to gain from holding out. They know Trump has backed us into a corner.
There was a way to do this - had the US moved years ago to reduce demand on oil products (ie more EVs like China is doing) this war was doable. The issue is, just like always, the US government operates in knee-jerk mode and does little long term planning (again, like China).
There might be some good news for airlines. *If* and only *if* the war ends quickly in the next few months, Jet A prices should fall significantly (although not to Dec 2025 pricing of under $2) and profits will be healthy, because they are pricing now for $4/gal gas. Same thing happened in 2016(?) when OPEC tried to undercut the frackers.