The US-Iran de-escalation deal may bring oil tanker traffic back to something resembling the pre-war norm, but the global energy trade will never be the same.<\/p>\n
Oil prices will very likely fall \u2014 Goldman Sachs lowered its fourth-quarter Brent forecast from $90 to $80 per barrel on Monday. But with so much uncertainty ahead, no one believes oil prices are fully out of the woods yet: Assuming a real ceasefire actually holds, it will take time, possibly months, to clear out trapped tankers and bring in new empty ones, and to rebuild and restart damaged production and export facilities. There will also be demand for oil to refill heavily depleted reserves in the US and elsewhere (China\u2019s reserves, conversely, remain robust, and its restocking appetite unknown<\/a>).<\/p>\n Still, the crisis was remarkable in that, despite the 1-billion-plus barrels yanked from the market since February, US and European benchmark crude prices didn\u2019t top the spike following the 2022 invasion of Ukraine. US \u201cenergy dominance\u201d definitely helped, as did the strategic reserves that were made for this moment, alongside the global clean energy transition.<\/p>\n More long-term changes are coming. The race to electrification is being redoubled, especially in Asia, which took the most painful hits<\/a> in the past few months. In a survey last week of 2,000 global executives, 91% agreed switching from fossil fuels to electric alternatives would improve their company\u2019s energy security<\/a>. \u201cThe countries that succeed will electrify, while diversifying supply chains and investing in resilience,\u201d Meghan O\u2019Sullivan, a former senior US energy security official, told me. \u201cEnergy geopolitics is shifting from barrels and tankers to minerals, grids, batteries, and technology.\u201d<\/p>\n The Strait of Hormuz will never really be \u201copen\u201d in the same way again, either. Iran has proven, and maintains, its military capacity to shut it down with relative ease, and may emerge from these talks with the long-term ability to exact \u201cfees\u201d for transit. Yet \u201cHormuz is a diminishing asset,\u201d Richard Goldberg, a Trump administration National Security Council official until last year, told me, as Gulf countries drive more investment into new pipelines and other chokepoint-defeating infrastructure. Whereas the years following the 1970s Arab oil embargoes saw Gulf states coordinating more closely on oil, the next few years may be defined more by competition, \u201cas Gulf exporters seek to offer discounts against each other,\u201d Columbia University\u2019s Karen Young said.<\/p>\n Meanwhile, Washington no longer functions in its traditional role as a guarantor of global energy security. The Navy proved capable of facilitating the movement of a limited number of tankers, including through the use of offshore oil transfer techniques<\/a> adapted from the Iranian and Russian shadow fleets, according to a nice Reuters scoop. But in general the US military proved incapable of quickly trouncing a much weaker adversary, and left the citizens and residents of Gulf allies under fire in the meantime. Trump nevertheless told The New York Times he could demand a payment of 20% of Gulf countries\u2019 revenue<\/a> for future protection. In those circumstances, Gulf countries will look to diversify their strategic alliances as much as their pipeline networks. And while \u201cenergy dominance\u201d did work to US consumers\u2019 advantage, it came at a cost to many allies. \u201cThat asymmetry could create important tensions between the US and its partners,\u201d O\u2019Sullivan said.<\/p>\n Until there\u2019s a strong deal in place with Iran, it won\u2019t be clear whether US \u201cenergy dominance\u201d really served a useful geopolitical function \u2014 or just made Trump\u2019s foreign policy adventures a little less painful for American voters.<\/p>\n","protected":false},"excerpt":{"rendered":"The US-Iran de-escalation deal may bring oil tanker traffic back to something resembling the pre-war norm, but the…\n","protected":false},"author":2,"featured_media":495922,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[114,184,85,46],"class_list":["post-495921","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-il","tag-israel"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/495921","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=495921"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/495921\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/495922"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=495921"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=495921"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=495921"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}