Rory Johnston: 13 Million Barrels Per Day Missing, Why Aren’t Markets Reacting?

About this episode

Tom Bodrovics interviews Rory Johnston about the current state of the global energy market and the implications of recent oil supply dynamics.

Tom Bodrovics welcomes Rory Johnston, a commodity market researcher specializing in oil and gas, to discuss the current state of the global energy market. Johnston highlights the unprecedented situation where OPEC+ output reached an all-time low last month, and the significant impact of the closure of the Strait of Hormuz on global oil supplies. Johnston notes that over 90 Very Large Crude Carriers (VLCCs) are headed to the US Gulf Coast to pick up crude, a situation that has gained attention, including from former President Trump. This influx of tankers is due to the Middle East being functionally offline and China banning the export of refined products, making the US and Canada the most energy-secure areas. Johnston explains that the current market dynamics are driven by a significant backwardation in the futures market, where the price of oil for immediate delivery is much higher than for future delivery. This is due to the acute shortages in areas that previously relied on Middle Eastern fuel, leading to a scramble for available supplies. He emphasizes that the market is not creating new oil but rather shuffling existing supplies to areas willing to pay more. The discussion…

People in this episode

Host: Tom Bodrovics

Guest: Rory Johnston

Topics covered

• global energy market
• oil and gas
• OPEC+ output
• commodity market
• futures market
• Strategic Petroleum Reserve
• energy security

Keywords

• oil supply
• OPEC+
• energy market
• crude carriers
• backwardation
• Strategic Petroleum Reserve
• global shortfall

Mentioned in this episode

Organizations: OPEC+, Strategic Petroleum Reserve

Places: Strait of Hormuz, US Gulf Coast, China, US, Canada

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