Transcript [00:00] Oil prices, oil prices, oil prices. [00:04] What does the oil industry think about [00:07] this war? What do they really think [00:08] about it? Where oil prices going? [00:10] President Trump is so concerned with the [00:12] price of oil. This is what we are going [00:14] to look at in this video. What's [00:16] actually happening with oil prices and [00:18] what can we expect? [00:20] So, let's just get right to the [00:21] headlines and let them tell the story. [00:24] So, [00:27] uh here's here's a headline, "Oil prices [00:29] jump after US strikes Iran over downed [00:33] Apache." This is from today from [00:34] oilprice.com. [00:36] So, let's start here. [00:38] "The US forces struck Iranian military [00:40] targets, oil prices jumped." Of course [00:43] they did, right? The Strait of Hormuz [00:45] is the Strait of Hormuz, right? That's [00:47] why they jumped. [00:49] That's pretty basic stuff, but look [00:51] where things get quite interesting. [00:54] So, oil prices jumped after the US [00:56] strikes Iran because oh no, escalation [00:59] means oil prices go up. And then, [01:02] "Oil prices fall nearly nearly 4% after [01:06] US energy secretary says Hormuz ship [01:09] traffic is increasing." This was the day [01:11] before. [01:12] So, the day before they spiked because [01:16] the [01:16] Iran US strikes Iran over downed Apache. [01:20] This was [01:21] uh and uh [01:23] This was also from This was from late [01:24] last night. A little bit earlier in the [01:27] day, we had oil prices falling nearly [01:30] 4%. 4% is a lot. It's a huge amount. [01:35] Okay? [01:36] Energy secretary Chris Wright goes on [01:38] CNBC and he says that ship traffic [01:40] through the Strait of Hormuz is rising [01:42] very meaningfully and oil drops nearly [01:45] 4%. [01:47] Right? WTI crude falls to around $87 a [01:50] barrel. [01:51] Brent crude drops over 3%. [01:54] And here's something important to [01:55] understand about oil markets. [01:57] When prices spike during a conflict, [02:00] it's usually not because oil is actually [02:02] missing from the market. It's not like [02:04] when America and Israel attacked Iran, [02:06] suddenly there was less oil. [02:08] You know, America's producing huge [02:09] quantities of oil and they don't even [02:10] use much of the oil from around the [02:12] world. It's not like suddenly there is [02:13] less actual oil. The reason that the [02:16] prices rise and fall is not because of [02:18] the amount of oil there is. [02:21] It's because traders are pricing in the [02:23] fear [02:25] that there might be a scarcity of oil. [02:28] They're buying That's what That's how [02:30] the price rises and falls like this. [02:33] They're buying insurance against a [02:34] future that hasn't happened yet, as it [02:36] were. So, when you see oil jump after a [02:38] military strike, it's not scarcity, it's [02:41] anxiety. [02:43] And what does that tell you? It tells [02:44] you that the market is not actually [02:46] pricing in a long war. [02:49] It's pricing in uncertainty. [02:52] That's why you have these drastic rises [02:54] and falls on the same day. These two [02:56] news stories I just showed you were from [02:59] the exact same day. They were just [03:00] reacting to two different events. So, [03:02] oil prices jump after US strikes, whoop, [03:06] all the way up, [03:08] and oil prices fell [03:10] after the energy secretary says Hormuz [03:12] ship traffic is increasing. And suddenly [03:14] there's this massive 4% drop. [03:19] Now, let's let's keep moving through [03:21] these headlines. Keep this one moving [03:23] quickly. Wall Street Journal from today. [03:25] Oil prices set to keep rising even after [03:29] Iran conflict ends, Shell boss says. [03:32] Wael Sawan, the boss of Shell, [03:36] uh the the CEO of of Shell said this, [03:39] right? Oil prices set to keep rising [03:41] even after Iran conflict ends. [03:45] So, here's the Shell CEO weighing in. [03:48] And he's saying that oil prices are [03:50] likely to keep going up. Why? Why after [03:53] the war ends? Because the disruption to [03:55] supply chains, [03:56] to shipping routes, to energy [03:58] infrastructure is not something that [04:00] flips back to normal the day the [04:01] ceasefire is announced. Insurance costs [04:04] uh [04:05] have skyrocketed on vessels traveling [04:07] around through the Gulf in that area. [04:09] Some shipping lanes have been rerouted. [04:12] There are structural adjustments that [04:13] take time to unwind that will keep [04:16] prices a little higher. And yet, or [04:19] he'll he says they're going to keep them [04:20] going up. And this is the tension I want [04:22] you to I want you to hold in your head [04:24] here. [04:26] The market has still not been pricing in [04:29] this a sustained high. Let me show you [04:31] what I mean by that. [04:33] So, we have a piece here from Bloomberg. [04:36] The next headline we're going to look [04:38] at. This is from Bloomberg from today. [04:41] Have oil prices already peaked? [04:45] Three things [04:47] three things to know. [04:49] Okay, there and this is all today. These [04:51] story The Wall Street Journal piece that [04:52] I just showed you, [04:54] where you have the Shell CEO saying that [04:57] oil prices set to keep rising after the [04:59] conflict ends. That's from today. And [05:02] this Bloomberg piece is also from today. [05:07] Cuz here's what here's what they're [05:08] saying. [05:09] They're saying that oil prices have [05:11] probably peaked. They're saying that [05:13] Brent crude may have already peaked just [05:16] above $104 a barrel [05:19] on a a monthly average basis. [05:21] Even with the Strait of Hormuz largely [05:23] closed, even with inventories falling, [05:27] they're calling this a temporary supply [05:30] disruption on top of a structurally [05:33] bearish [05:34] backdrop. Bearish means good. [05:37] Right, a structurally bearish backdrop. [05:39] So, there's a temporary supply [05:41] disruption, but really the supply is is [05:44] doing very well [05:46] in the long term. [05:47] Meaning, let me explain this. What [05:49] they're saying is that even in the [05:50] middle of a shooting war with Iran, the [05:52] oil market's long-term view is actually [05:55] very good. [05:57] Demand growth is slowing. Non-OPEC [06:00] supply is rising. Trump always talks [06:03] about this. He talks about how, you [06:05] know, they're ramping up production in [06:06] the US and then Venezuela is producing [06:08] more oil than they have before and I [06:10] mean their non-OPEC supply is rising. We [06:12] also know what the UAE did where they [06:14] they pulled out of OPEC so that they [06:16] could increase the amount of oil that [06:17] they're putting out and they have [06:18] they're rapidly [06:20] expanding their pipelines. [06:22] So, the long-term prospects are fine. [06:26] Once the shock of the war fades, [06:28] attention goes back to those [06:29] fundamentals. The fundamentals of the [06:31] oil industry are fine. [06:34] And that's an amazing thing to say about [06:36] and it's in Bloomberg [06:38] and it really shows up kind of market [06:40] confidence. [06:42] Now, take a look at this one. This is [06:44] from Anadolu, which is generally not a [06:46] friendly outlet. This is the Turkish [06:48] state media. What do they write? Look at [06:50] this headline. This is from yesterday. [06:52] These all these stories are from [06:53] yesterday or today. Oil prices fall over [06:56] 5% after Israel-Iran halt attacks easing [07:01] supply fears. And that's where Brent [07:03] dropped below 90 $90 a barrel. WTI falls [07:06] below 87. [07:08] Great. [07:09] This is the confirmation of exactly what [07:11] I'm describing. The moment there were [07:13] signals that Israel and Iran might be [07:16] you know, we're having a ceasefire, [07:17] boom, oil drops over 5% and it's, you [07:20] know, [07:21] quickly. [07:22] It's a massive single day move. [07:25] And that's the market saying we never [07:27] actually believed this was going to be a [07:29] long-term supply crisis. That's the [07:31] point I'm making in this video. [07:35] The market doesn't believe there's a [07:36] long-term supply problem of oil. [07:40] So, the moment that they saw an [07:41] off-ramp, oh, everything's fine. The [07:44] The price drops again. [07:47] And now you have Now you have this. [07:49] Let's zoom out a little bit and look at [07:51] something a little bit older. This is a [07:53] political piece [07:56] uh from [07:58] from earlier this month, from like a [07:59] week ago. [08:01] Okay, this is So, this is a little bit [08:03] older. Everything else I've showed you [08:04] is from yesterday and today. [08:06] This is Politico reporting a week ago [08:09] that the White House was worried about [08:10] the oil price spike. [08:12] And it makes sense, right? We know that [08:14] Trump's been focused on it. [08:16] He wants the cheap gas. He doesn't want [08:18] a war with Iran that blows up [08:20] prices for [08:22] uh for the consumers. [08:24] And I've talked on this channel, I [08:25] talked about it I think about a week [08:27] ago, 2 weeks ago, about the Iran-Oman [08:29] story, about how Iran has been trying to [08:31] use the Strait of Hormuz [08:33] uh uh [08:35] with Oman saying that they're going to [08:37] manage it, they're going to charge [08:39] tolls, and they're going to create a [08:40] kind of permanent tolling arrangement. [08:44] Uh [08:45] And And they're using Oman's reputation. [08:48] Remember that that issue? But what the [08:51] oil markets are basically saying is that [08:53] they don't really believe in that play. [08:54] They don't believe that that has any [08:56] teeth to it. Cuz if they believed that [08:58] there was any teeth to that, then that [09:00] would be a long-term concern. [09:03] Every time there's a signal that the [09:04] Strait of Hormuz is opening up, [09:07] oil drop oil price drops like a stone. [09:09] The market doesn't believe that Iran [09:12] really has the ability to create a [09:13] long-term disruption in the Strait of [09:15] Hormuz. That's my point here. [09:17] If it's getting a little confusing. [09:19] Let's take a look at one more headline. [09:24] This is the last one. [09:25] And this is from [09:28] today, from a few hours ago. Crude oil [09:31] is higher, but it is not running after [09:34] the increased conflict in the Middle [09:36] East. What does that mean? [09:38] It's not running. [09:40] Even with the latest escalation, US [09:42] strikes after the downed helicopter, [09:45] and you know, everything's getting a [09:46] little more skittish and a little more [09:48] kinetic in the in the Straits of Hormuz, [09:49] you'd you'd expect crude oil to be [09:51] spiking today. No. It's not running. [09:55] It's not spiking the way you'd expect. [09:59] The phrase not running [10:00] means that it's it's it's well, it's [10:03] walking, right? It's nervous, but it's [10:05] not panicking. That's how the that's how [10:07] the that's how the market is behaving. [10:11] So, [10:12] so let's pull this all together now. [10:14] Okay, let's let's kind of [10:17] talk. [10:19] Here's the picture I'm seeing, and tell [10:20] me if you think I'm reading this wrong. [10:21] I'm not an oil expert. I'm just reading [10:22] a lot of headlines, trying to dig into a [10:24] story, do some research, try to [10:26] understand the dynamics, and see what [10:28] everyone in different media agencies are [10:30] saying about the same story in the same [10:33] 48-hour period. That's what I'm doing [10:34] here. [10:36] So, here's what I'm seeing, and tell me [10:38] if I'm wrong. [10:39] The oil market [10:41] oil market has access to more [10:43] information and a more analytical [10:45] firepower than almost any other [10:46] institution on Earth. [10:48] Okay, and what it's [10:50] looking at, what it's seeing, is it's [10:53] pricing in [10:55] a war that has a beginning, middle, and [10:57] end. [10:59] They're not seeing a forever war. [11:01] They're pricing in disruption, [11:04] but it's manageable disruption. [11:06] Right? The price spiked when the US hit [11:08] Iran. It dropped when the cabinet [11:11] secretary said that ships are moving [11:12] again. It dropped 5% when there was when [11:15] Israel and Iran stopped firing at each [11:17] other in one day. [11:21] The market is not [11:22] is not behaving as though it believes [11:25] that Iran will continue with its [11:28] disruptive behavior long-term. It is not [11:31] behaving as though it believes that [11:34] there's going to be any real scarcity. [11:38] Right? It's not It's not seeing the [11:40] Hormuz Strait being closed long-term. [11:43] It's seeing the market is behaving as [11:46] though it's seeing that this is going to [11:47] end soon. [11:48] And that actually tells us something [11:49] important about where the broader [11:51] conflict is heading. [11:52] Something maybe more reliable than any [11:55] of the geopolitical commentary out [11:56] there, including mine. [11:58] Because money talks, and again, the oil [12:00] industry, really, that's like finger on [12:02] the pulse of what's really going on. [12:05] And the money is saying that Iran's [12:07] leverage, [12:08] whatever it looks like now, is [12:10] temporary, that the Hormuz situation is [12:13] going to be resolved, [12:15] that the end game might be coming into [12:17] view. So, I'm going to keep watching [12:19] this, [12:20] keep trying to learn, and maybe some of [12:21] you will educate me in the comments. [12:24] But, thank you for watching. Please [12:25] share this if you found it useful. And I [12:27] don't remind you enough. Please make [12:29] sure that you are following all the all [12:31] the videos that we're putting up on [12:34] Israel 365 News. A lot of important [12:36] stuff going up there, and if you really [12:37] want to follow all of my commentary and [12:40] interviews and analysis, make sure that [12:42] you're subscribed to Israel 365 News [12:44] YouTube channel as well. [12:47] Thank you for watching, and God bless.
