Oil and Politics
With Trump’s attacks on the Middle East (Iran, we can expect higher prices for oil and more than likely lower inventory.
Trump has signaled that the war in Iran could last four to five weeks—or go “far longer.” If tensions in the region continue, it could cause major disruptions to global energy markets and trigger widespread inflation. As of Tuesday morning, prices for Brent crude oil reached as high as $83 per barrel. After Qatar halted production on Monday, daily freight rates for liquified natural gas (LNG) tankers jumped more than 40%.
“This is going to have a wide effect on energy markets, not just in the Middle East or in Asia, but a little bit in Europe as well,” Karen Young, senior research scholar at the Center on Global Energy Policy at Columbia University.
I suspect, oil prices and gasoline prices will increase whether there is a crisis or not. It just takes a hint and prices will escalate. The industry does not need a real reason. Three tankers have incurred damage to date. We could see this playing off in a weaker US economy. It is experiencing a slow down carying over from 2025.
“Maritime exports of petroleum products increased in January 2026,” U.S. Energy Information Administration (EIA)
U.S. exports of refined petroleum products carried on clean product tankers have increased steadily over the last year, with exports totaling 6.3 million barrels per day (b/d) in January 2026, about 10% more than in January 2025 and near record highs, according to data from Vortexa. Growth in exports of diesel, gasoline, and liquified petroleum gases (LPG) drove the overall increase. Exports of diesel both increased and shifted destinations, with more headed to Europe and less headed to South America, which has historically been the largest destination for U.S. distillate exports.
According to our Weekly Petroleum Status Report, total petroleum product exports in January 2026 averaged 7.0 million b/d, about 540,000 b/d, or 8%, higher than last year. Clean petroleum products include most finished products, like gasoline, diesel, LPG, and jet fuel, but not crude oil or certain heavier petroleum products, like residual fuel oil. The terms clean and dirty distinguish between products that must be carried on different classes of tankers.
Diesel made up the largest change, increasing by over 210,000 b/d, or 19%, compared with January 2025, reflecting increased demand from Europe. Compared with January 2025, U.S. diesel exports to Europe more than doubled, from 167,000 b/d to 396,000 b/d in January 2026.
Increased diesel demand in Europe may be the result of increased need for power and heating this winter and constraints on the availability of diesel supplies from other sources since last autumn. Sanctions targeting Russia’s oil companies and refiners of crude oil from Russia altered the flow of crude oil shipments to refiners and contributed to tightness in global refined product markets that led to sharp increases in diesel refining margins last November. Although overall conditions in the diesel market have eased since then, the structural challenges facing the European diesel market provide additional support for higher exports from the United States.
As diesel exports to Europe increased, exports to South America decreased, keeping U.S. diesel exports to that region slightly below the 2025 high set in June. South America typically makes up the largest portion of U.S. diesel exports, making up 37% in 2025, compared with 22% for Europe. However, In January, increased demand in Europe pushed U.S. diesel exports to Europe higher than those to South America.
After diesel, the second-largest change in total clean product exports compared with January 2025 was from LPG, which also increased by just over 210,000 b/d, or 7%. Increasing exports of LPG reflect shipments of propane and butane out of the U.S. Gulf Coast, as U.S. inventories have trended above the five-year high this winter.
U.S. exports of gasoline and jet fuel also increased in January 2026, likely reflecting lower U.S. prices as Europe’s demand for diesel supported strong U.S. refinery runs and production of other fuels. U.S. exports of gasoline increased by about 55,000 b/d, or 7%, compared with last year, and U.S. exports of jet fuel increased by over 60,000 b/d, or 78%.
Principal contributor: Kevin Hack
America has been financially nuked … by itself. Imagine a naturally occurring 44 year cyclical crash caused by the accumulation of US household debt and corporation debt and the malinvestment and overvaluation of asset classes that have little relationship to the consumer underlying base of the macroeconomic pyramid. Now add to that natural inevitable cycle, a self-inflicted global energy supply chain instantaneous toilet clog that has resulted in one-week 35-100% higher energy prices and the selling of US debt by Gulf states and Asian states dependent on oil for state, political, and economic stability.
In 1929 at peak saturation investment and private/debt accumulation of the naturally occurring cycle, the DJIA initially lost 47.9 % of its valuation from its 3 Sept 1929 peak to its 13 Nov 1929 nadir.
In 2025 at a similar peak saturation investment/private debt accumulation point, and without the Iran war, what would the nadir valuation of the 25 Feb 2026 global peak ACWI valuation 5/13/13/8 day :: x/2.5x/2.5x/8 day 4 phase fractal series crash have been?
in 2025 The Gulf states invested 138 billion in in US equities, US citizens: 425 billion and US corporations 1-1.1 trillion including buybacks. Less than a week after the start of the Iran war, gulf states are discussing Force Majeure with regards to their investment commitments.
Over 9 trillion dollars of IRAs are invested in equities.
The initial 1982 44 year inevitable and deterministic natural equity crash devaluation nadir is going to be substantially lower with the initiation and ongoing pyromaniacs of the Iran war and very likely to be greater than the 48% DJIA 1929 initial crash devaluation.
@TEF,
By what date should be expect a >48% devaluation in the DJIA, according to your inevitable and deterministic model? 7 April 2026?
Unlike 1929, the world is no longer on the gold standard. Unlike 1929, the US dollar is the world’s reserve currency. Unlike 1929, the world has experience with Keynesian economics. It seems to me that a model moored in events of 100 years ago has to answer to the changed economic realities that have occurred during the following century.
JE:
From the 25 Feb 2026 global peak ACWI valuation: a 4-phase fractal crash decay series: x/2.5x/2.5x/1.6x :: 5/13/13/8 trading days or 36 trading days.
@TEF,
36 trading days from 2/25 would be 4/9. So you predict that the DJIA will be <25,000 by 9 April 2026?
TEF:
The prices are speculation. It increases because they can do it knowing there may be a catastrophe ahead. So why not rent take now when there is no shortage and take the profits? We are talking oil supply and gasoline refinement, yes? Would this have occurred if the dumb ass in the White House not joined Israel in attacking Iran? Not for a time to come, if ever.
OPEC slammed us in 2001. We attacked Iraq and similar increases occurred. Gasoline and oil prices went up not because of production and throughput but because of replacement of resource and rent taking.
I believe 30 days is about right.