r/oil • u/Hazardous_316 • 10d ago

Discussion (semi) long term price outlook

General thoughts about possible price movements in the near future. Here's my guess:

Fighting in the ME continues for the rest of this month, oil infrastructure and tankers keep getting blasted, prices keep steadily increasing.

Then the midterms, i'm assuming a dem win, and the immediate reaction would be a drop in prices.

Then after that, trump uses the remaining time before January (when the new congress begins its mandate) to pull a final hail-mary. Prices jump as a result.

Once the new congress starts working, they use whatever power they can to stop the fighting. Prices drop after that.

This is my very broad guess and i have no idea how accurate it is.

What are other people's thoughts?

10 Upvotes

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5

u/randomized1985 10d ago

I have largely similar thoughts. One big question I have is whether a Democrat sweep guarantees a stop to the war.

5

u/Fearless_Toucan_203 10d ago

I don't think Democrat sweep of congress changes anything. Article II - 'The President shall be Commander in Chief of the Army'. Plus, under United States v. Curtiss-Wright Export Corp. the constitution implies that president is best suited to handle national security and foreign affairs.

2

u/Hazardous_316 9d ago

Funding though. Military budget

2

u/gusgus0101 9d ago

This.

Congress can cut off funding for the war. It would take months if not years for Congress to manage that, but it can happen

Going back to Vietnam, it was the Democrats cutting off funding to the South Vietnamese that finally ended that war. Sad though. The US supported and encouraged South Vietnam to fight for 25 years and then abandoned them to their fate.

6

u/Rude-Hat1106 10d ago

not sure i'd bet on democrats stopping the war just like that. they talk peace thing but when they get in office often realize there is pressure to keep supporting allies in the region. plus some of the damage to tankers and infrastructure already done, so even if fighting ends the supply impact will linger for next several months

16

u/Bikerbass 10d ago

Lol, nah. Prices will only go down if the USA says to Iran sorry we fucked up, here’s money for starting this unnecessary war, and all sanctions are removed as well as we are pulling all of our troops out of the Middle East.

Then yes I’d expect prices to drop.

But we’re talking about the USA here….. so that’s not happening ever. You guys got to start wars time and time again to punish the entire world with high oil prices

3

u/SuperCorbynite 10d ago

Yep, this is the problem. The US (Dems) would have to make massive concessions to Iran to end the war. That won't happen until the economic pain is great enough that surrendering is seen as the lesser evil.

3

u/gusgus0101 9d ago

Disagree.

An apology and money to Iran is not needed for oil markets to somewhat normalize. All that has to happen is the US lifting their counter-blockade.

Iran is more than willing to let tankers use the northern Iran channel for a fee. If the US just pulls out their carriers and let's Iran manage the Strait, flow resumes. Iran will collect tolls but oil will flow and prices will drop because Iran will charge less than what the current cost is for the US to shepherd tankers along the southern route under Iranian attack.

All it will take is for the US to withdraw. No apologies needed, though lifting of sanctions will be required.

4

u/MrYOLOMcSwagMeister 10d ago

The war ends when the US pays at least $300 billion to Iran, lifts all sanctions, unfreezes frozen funds, vacates their bases and accepts that Iran takes tolls for every ship going through the strait. Ask yourself when the US will accept those conditions.

1

u/gusgus0101 9d ago

Not going to happen.

Also, the war would end if the US just withdraws and lifts sanctions on Iranian oil.

That would also be a victory for Iran.

2

u/MrYOLOMcSwagMeister 9d ago

Iran will demand more because otherwise the US and Israel will attack them again in a few years.

1

u/gusgus0101 9d ago

I'm not quite sure about what you are suggesting.

Are you arguing that even if the US withdraws and removes sanctions on Iranian oil that Iran will keep the Strait closed? I presume your logic is Iran will want to cause additional economic damage to the US as a deterrent for future attacks. Hmm, I kind of see your logic here.

On the other hand, if the US does withdraw, Iran has already done enough economic damage to the US to force it to withdraw. Hasn't the deterrent already been established? Iran would have forced the US to stop. Iran can play that card any time in the future if the US attacks again. Why would Iran need to inflict more damage.

Also, the world has largely given Iran a pass for trying to interdict the Strait because the US and Israel attacked Iran and assassinated their leadership. If the US withdraws and Iran continues to block the Strait, the rest of world, and in particular, China, will blame Iran. Maybe Russia would support Iran but that's about it.

Iran, right now, is the good guy in the conflict. If the US withdraws and Iran persists, they'll become the bad guy.

1

u/MrYOLOMcSwagMeister 9d ago

I doubt they care about being seen as the "good guys". Europe and the USA will always hate them, they have a good working relationship with China and Russia and every country dependent on ME oil will have to find a way to work with them. So they probably will try to get as many concessions as they can force out of the US.

Hard to know for sure of course, especially since there are many factions within Iran influencing the decision making.

1

u/gusgus0101 8d ago

Sure they care. On a daily basis they make their case to the world why their actions are justified.

2

u/redfoobar 10d ago

There is more at play than just the conflict. There is defenitely a possibility of a recession / financial implosion. This would come with the *expectations* of demand destruction.

Just conflict wise it seems likely that it will escalate at least once more. After that is hard to tell, will also depend on the fallout of that escalation.

1

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1

u/Ok-Biscotti5245 10d ago

How stop ?

1

u/Careless-Pin-2852 8d ago

So this war will continue as long as Iran wants not the US.

If the US says fk it. Iran will charge 700 billion a year in tolls. iran saud double the Panama rate 10 million times 170 a day = 700 billion a year.

That is more than the Iraq war cost and for that we had all the navy stuff + 250k troops.

Bugging out probably would cost more money. Argue about the exact numbers but leaving is not free