Geopolitical developments over the last several months have resulted in perhaps the most chaotic and unstable energy market in the last 50 years, rivaled only by the OPEC oil embargoes of the 1970s, the global financial crisis in 2009 and the COVID lockdown years of the early 2020s. The disruptions have driven crude oil prices and production higher in the short term, but there’s a potential long-term shift just ahead. In today’s RBN blog, we look at how the changes on the horizon could lead to sharply lower global crude oil prices and a rollback in U.S. production, two forecasts at the heart of our newly available Future of Fuels report.
It’s been a year of dramatic change, starting with the U.S. removal of Venezuelan President Nicolas Maduro in early January (just before our previous report was published). Things have only accelerated since then, highlighted by the U.S. and Israeli war against Iran that began on the last day of February. While the damage to energy facilities across the Middle East has been significant, the largest impact by far has been the closure of the Strait of Hormuz, mostly stopping the flow of one-fifth of global crude oil and millions of barrels of refined products, while also impacting the LNG market and a number of other commodities. The on-again, off-again talks to find a lasting resolution to the conflict, along with the most recent escalation by the Houthis threatening tanker movements through the Bab el-Mandeb Strait, have only added to the global uncertainty.
The Future of Fuels bi-annual report by RBN's Refined Fuels Analytics provides an in-depth analysis of the U.S. and global refinery industries, focusing on crude oil and fuel market dynamics, supply and demand, alternative fuels, refinery capacities, and price forecasts to help stakeholders navigate the evolving energy landscape.
In addition to the events in the Middle East, the Russia/Ukraine war continues to provide additional stress to markets, especially the rapidly accelerating damage Ukraine has inflicted on Russian refineries, resulting in throughputs hitting decades-long lows and the loss of well over 2 MMb/d (and growing) of refined products. Chinese responses to these events and a variety of other global developments also continue to add uncertainties. Less immediately impactful — but maybe the most significant in the long term — was the exit of the United Arab Emirates (UAE) from OPEC in May, which we expect to have many knock-on effects in the market.
As discussed many times in the RBN blogosphere this year, the changes and unrest noted above have driven prices higher for crude oil and refined products, leading to record-high U.S. crude oil production, surging crude exports and refining margins, and rig counts that are now well above year-ago levels. It’s a rosy picture for producers, and we expect pricing and production will continue to rise in the short term. But major market headwinds appear on the way; the question is how soon they arrive.
Here’s where things stand today and why we could be headed for an era of crude oil oversupply:
Join Backstage Pass to Read Full Article
About the song
“Waiting on the World to Change” was written by John Mayer and appears as the first song on his third studio album, Continuum. Mayer stated that he had written the R&B ballad as an attempt to capture his generation’s frustration with the changing world around them. Released as the first single from the album in July 2006, it went to #1 on the Billboard Adult Alternative and Adult Contemporary charts, and #14 on the Billboard Hot 100 Singles chart. It has been certified 4X Platinum by the Recording Industry Association of America. Personnel on the record were: John Mayer (lead, backing vocals, lead guitar), Pino Palladino (bass, backing vocals), Ricky Peterson (keyboards), Roy Hargrove (horns), and Steve Jordan (drums, percussion, backing vocals).
Continuum was recorded between November 2005 and July 2006 at Village Recorders in Los Angeles, Royal in Memphis, and Avatar and Right Track in New York City. Produced by John Mayer and Steve Jordan, the album was released in September 2006 and went to #2 on the Billboard 200 Albums chart. It has been certified 4X Platinum by the RIAA. Five singles were released from the LP.
John Mayer is an American singer, songwriter, guitarist and record producer. He attended Berklee College of Music in Boston before leaving to play the club scene around Atlanta in the late 1990s. He released an independent EP, Inside Wants Out, in 1999. After an appearance at South by Southwest in Austin in 2000, he was signed by Columbia Records. He has released eight studio albums, seven live albums, five EPs, three compilation albums and 25 singles. He has sold more than 20 million records worldwide. He has won two ASCAP Awards, seven Grammy Awards, two MTV Video Music Awards and a World Music Award. As a hobby, Mayer collects high-end watches and has a collection valued at over $10 million. He continues to record and tour and will be appearing at Radio City Music Hall in New York City with Buddy Guy in October.
"About the Song" -- written by Mickey McMahan , RBN Director of Musicology
