S&P: Fuel Price Goes Up, STAYS Up

 Remember Trump's dictum that fuel prices drive inflation (or deflation)?

You may find out the very hard way that he is correct.

 

...S&P Global Energy, in a recent analysis, said the oil market now features two things that theoretically should not happen in parallel: a decline in inventories and a drop in demand.

As S&P Global Energy said in the analysis, those “seemingly contradictory developments occurring in tandem shows that the full severity of the greatest supply disruption in history is yet to come.”...

... “While there have been significant impacts to date, the oil market has remained somewhat cushioned from the full impact of the loss of 15 million barrels per day in supply,” Jim Burkhard, S&P Global Energy’s vice president and global head of crude oil research, said in the report. “That the cumulative supply loss is now approaching 1 billion barrels is a staggering figure that inventories cannot cover indefinitely. An inevitable market reckoning is coming.” ...

OK.  So what's the bottom line?

 ....“S&P Global Energy expects that, if Hormuz were to be reopened, it would take an additional seven months at minimum to fully restore upstream production, assuming no permanent damage and supply chains operate smoothly,” the report said. “A recovery could take longer if there is damage to ports or other transport and loading infrastructure. The longer the strait remains closed, the more likely the supply crisis extends into late 2026 and into 2027.”

Burkhard’s warning to consumers was ominous. “What is a tremendous curtailment of demand is still being outstripped by the loss of supply,” he said. “That means that higher crude oil and refined product prices are still to come.”...

Lovely.  Just f'n lovely.