Welcome to Friday, everyone. This could be a spicy weekend. Let’s hope not. But here’s the math behind why Trump is approaching the desperation level…
Accounting for the Missing Oil
One thing that the ““markets”” are currently not doing a very good job of is factoring in the missing oil barrels.
So let’s start with the Goldman Sachs analysis:
Yes, we’re all just going to have to wait and see how badly the oil fields were damaged by their sudden shutdowns. Nobody knows, it’s literally a wait-and-see situation. But it’s almost certainly a number higher than zero. And untangling the tanker logistics is going to be its own challenge.
But let’s take the analysis at face value. If 14.5 Mb/d of oil + products are missing, that pencils out to 435 million barrels per month. Now that we’re closing in on month #2 of the war, that’s already 870 million missing barrels.
And remember, it’s not just the barrels themselves, but also the proportion of exported (seaborn) oil and related products that they represent. These are massive numbers:
Okay, let’s be extremely generous and assume the war ends this weekend and the Strait is fully reopened to bidirectional traffic Monday morning.
The GS analysis then says Gulf oil flows would only be 70% restored after three months. Again, being generous, let’s assume that the oil flows recover to 50% in month one, 60% in month two, and hit the 70% target in month three.
Running the numbers, this pencils out to another 522 million barrels missing from the Gulf. That translates into ~1.4 billion barrels missing from the Gulf.
The GS analysis then proposes that oil flows will restore to 88% by
by flyingdoc 
