It sure looks like the Donald is on the receiving end of a double-whammy. His victory declaration in Iran looks to rank right up there with George Dubya Bush’s “mission accomplished” pratfall on the deck of a US aircraft carrier in 2003; and that also means that his SOTU boasting about defeating “Joe Biden’s” inflation and getting the gas pump price under $2 per gallon is out the window, too.
What’s back in play front and center, therefore, is the AFFORDABILITY issue come November. The Dems have no clue about how to fix it, of course, but they sure as hell will be brutally pounding the GOP candidates and the Donald with the latter’s own bogus hot air on the matter.
For want of doubt, consider the conflagration in the global oil markets at this very moment. At ground zero in the Persian Gulf, the major crude oil from the region have already shot the moon.
Thus, Oman crude prices are up to $154/barrel, crossing $150 for the first time ever. At the same time, Dubai crude is up to $130/barrel, while Brent is trading at $110.
This means, in turn, that the gap between Oman and world prices is off-the-charts wide, and now stands at 30% or $44 per barrel. By comparison, before the Iran War, the difference between all benchmarks was just $5 per barrel during January and February.
In very short-run, of course, Brent and WTI are priced based on US and European supply conditions, while the actual disruption is concentrated in the Middle East, meaning they do not fully capture the severity of the physical shortage. YET.
On the other hand, global crude oil markets everywhere and always eventually get arbitraged, causing the major marker grades to fully reflect worldwide supply, demand and inventory conditions. So unless the Gulf is re-opened within a matter of days, the marker grades will soon rise toward these Gulf prices as global inventories continue to be liquidated.
Hellbound and Down 