Oil Pricing Is Going Crazy

Peter Zeihan 4 min

A severe break in the security environment allows the market to function differently. By the time we get to the end of the year, unless something is resolved politically, we're going to be looking at outright breaks in supply lines.

Chapters

  1. 0:00

    Global Oil Price Surge

    Base oil prices reach $105 a barrel, but complex transport logistics significantly increase the actual cost to buyers. Surcharges for insurance and extended shipping routes caused by geopolitical instability add substantial fees to the final price. Long-haul transport adds at least $25 per barrel to crude prices, pushing final costs over $40 for certain regions.

  2. 0:24

    Regional Market Disparities

    Security breaks cause massive price differences between regions, allowing some countries to profit while others suffer losses. The United States benefits from minimal transport costs, whereas Canada loses money because its oil is piped domestically rather than exported globally. Supply lines will face outright breaks by year's end unless political issues are resolved.

Key points

  • 0:00

    $105 a barrel

  • 0:24

    Surcharge insurance costs

  • 0:42

    Sailing all the way around the planet

  • 0:42

    Tanker rates start going up

  • 0:42

    Iranians hitting tankers

  • 0:42

    $25 a barrel

  • 0:42

    Surpassed $40 a barrel

  • 2:47

    $75

On the map

Map of the places in “Oil Pricing Is Going Crazy”

Who and where

Places · 18

  • Persian Gulf 4
  • Canada 2
  • India 2
  • Europe 2
  • People's Republic of China 2
  • United States 2
  • Russia 1
  • Arabian Sea 1
  • Western Siberia 1
  • Qatar 1
  • Africa 1
  • Alberta 1
  • United Arab Emirates 1
  • Kuwait 1
  • Southeast Asia 1
  • Saudi Arabia 1
  • Japan 1
  • Ukraine 1

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