Art Berman: Iran War Causing ‘Phase-Shift’ in Oil Markets, ‘Will Never’ Return to Normal
About this episode
Art Berman discusses the impact of the Iran War on oil markets and the potential for a permanent shift in global oil dynamics.
Stijn Schmitz welcomes back Art Berman to the show. Art Berman is The Energy Realist. Berman explains that the initially feared catastrophic disruption from the Iran War has been partially offset, with production losses revised down to roughly 5 million barrels a day, though he stresses this remains a historically massive number. The absence of immediate global economic collapse is attributed to significant demand destruction, particularly in China, and the critical role of inventories. Using an analogy of a savings account versus a paycheck, he distinguishes between strategic and commercial reserves, noting that ample inventories have cushioned the market, preventing oil prices from spiking as they did during the Ukraine war when stocks were dangerously low. However, he warns that this cushion is finite and being drawn down at an alarming rate, with his comparative inventory model suggesting severe price pressures could materialize by November. The discussion highlights the profound risks associated with shut-in production, where wells may never return to prior output levels due to complex subsurface physics. Berman describes the situation as a permanent “phase…
People in this episode
Host: Stijn Schmitz
Guest: Art Berman
Topics covered
- oil markets
- geopolitical impact
- energy production
- inventory management
- economic implications
Keywords
- oil prices
- production losses
- strategic reserves
- demand destruction
- geopolitical blocs
Mentioned in this episode
Organizations: The Energy Realist
Places: Iran, China, Persian Gulf
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