Iran War and Diesel Export Threats Drive Global Oil Supply Shocks
What happened
The Iran war triggered the largest oil supply shock in history, causing emergency reserves to run dry. Diesel prices in the US have risen almost 90 per cent since January. Donald Trump is considering a diesel export ban that would particularly affect Latin America and Europe. Concurrently, the interest rate on 10-year US government bonds reached 5.3 per cent.
From marxist.com
Why it matters
The instability in the Middle East and the supply shocks are driving up borrowing costs globally. Central banks are reacting by raising interest rates, while US federal debt has surpassed $40 trillion. The drying up of cheap funding from the Bank of Japan adds to the financial strain.
Global logistics are facing headwinds due to congestion in key hubs, including Europe, the Middle East, and West Africa.
From marxist.com
Who's involved
- Middle EastThe Middle East region is the source of the oil supply shock due to the Iran war.
- Donald TrumpDonald Trump is proposing a diesel export ban that would impact Latin America and Europe.
- EuropeEurope is a region expected to be heavily impacted by the proposed diesel export ban.
- Latin AmericaLatin America is a region expected to be heavily impacted by the proposed diesel export ban.
- Bank of JapanThe Bank of Japan is facing reduced availability of cheap funding.
Who could feel it
Possible knock-on effectsThese are possibilities Brind reasoned out, not predictions, and not advice. Most are not stated in any report.
- Latin AmericaSpeculative
Latin America might see higher fuel costs due to a potential US diesel export ban.
- EuropeSpeculative
Europe could experience squeezed economic activity due to the diesel export ban and high borrowing costs.
- Bank of JapanSpeculative
The Bank of Japan could face reduced monetary support as cheap funding dries up globally.
Keep exploring
Part of
Global logistics face headwinds as congestion in key hubs like Europe, the Middle East, and West Africa drives up rates, with infrastructure identified as a major bottleneck.Also in this story
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The entities involved
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Latin America
region of the Americas where Romance languages are primarily spoken
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Europe
terrestrial continent located in north-western Eurasia
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Middle East
geopolitical region encompassing Egypt and most of Western Asia, including Iran