2026 Fuel Prices & Security of Supply

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Ultimate Geek
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#3490281 12-May-2026 17:26

One of those great graphs - all (quite possibly) true, but designed to scare not inform...

It's all about the Y-axis and that 'assumption'.

Taking a hard look at the graph's _hard data_ it shows the first month of war dropping the black curve just below recent past levels.
So big whoop...

Then there's the 'assuming no resolution' orange extension - heading for zero oil at top speed.
Except who thinks that there are no other oil suppliers in the world ?
Who thinks that the many world oil fields won't be cranking up production - now that the value of their output is up by 20%.
(Yes I know we're paying double - but the cost of crude is not up by that amount.)
The reason for OPEC's existence is to manage/restrict oil output - to keep the price up.
Who doesn't think that signifies excess world oil-production capacity.

So the orange line is BS - true only if you accept the silly assumption.

SaltyNZ

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#3490310 12-May-2026 21:34

pdh:

Except who thinks that there are no other oil suppliers in the world ?
Who thinks that the many world oil fields won't be cranking up production - now that the value of their output is up by 20%.

It's not merely about can the US pump out more oil. Can the US load that extra oil onto tankers? You don't typically build twice as much capacity as you need and then just let it sit idle. Source: can barely get enough budget to build the stuff that keeps the lights on. Double that? As if.

But even if they could double their output and load it onto tankers, there are fewer tankers available to take it because a bunch are stuck on the wrong side of the Strait and the ones that can be used have to travel twice as far to get to Asia. If your tanker has to travel twice as far, then it can only carry half as much oil in any given time. Some tankers can take shortcuts through the Suez or Panama canals, but those are the smaller ones and there are traffic limits, especially on the Panama canal which has a water shortage.

You also can't just dump any old oil into a refinery. It has to be tuned to the kind of oil you're using. I assume modifying the refineries doesn't take years but it isn't just a knob you turn either.

So it may not be true that we are heading for a zero oil crash, but it's also not true that it's business as usual just with higher prices. Shortages are coming if the situation does not resolve. And that's just the oil - the other countries might not be setup to make up the shortfall in the byproducts and closely associated petrochemicals we are also missing out on like sulfur and helium, or fertiliser.

In the longer term Iran will lose because the other Gulf states will arrange with Saudi to put pipelines across to the Red Sea, other countries will increase their output, more tankers will be made available, and in the meantime any sensible country will finally be fast tracking their projects to actually get off of oil once and for all. I would not put my money on Iran simply shrugging and quietly walking away though. They still have a ton of missiles, drones and launchers and 400kg of partially enriched uranium, and they can build more missiles and drones in particular a lot faster than the US can build more interceptors. For all we know they may have built well enough and deep enough that the enrichment facilities only need to be dug out and they can start up again, and at this point if you're Iran you are absolutely building a bomb because it's clear that Israel and the US will just go ahead and bomb the crap out of you whenever they feel like it, but funnily enough they don't do that to North Korea for some reason. Worst case you can mix a bit of spent fuel crap from Bushehr into the warheads of your conventional missiles to contaminate everything they fall on just for fun.

Once it begins to look like their chokehold on the Strait is about to lose its value, they're going to fire off everything they have in order to destroy as much as possible around the region while it still matters.

So the way I tend to see it is that we're going to get shortages, possibly serious, which will gradually improve again over the course of the next year until Iran sees they are losing their leverage, then everything across the Gulf gets seriously damaged or destroyed leading back to more serious shortages, which will then gradually improve again.

And either way the path forward for the people of Iran is going to be very bloody because the theocracy has all the guns but at some point the situation there is going to get dire enough that throwing yourself at the IRGC until they run out of bullets so you can tear them apart with your bare hands will start to look like the least worst option.

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fastbike

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Ultimate Geek
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#3490338 13-May-2026 06:59

pdh:

One of those great graphs - all (quite possibly) true, but designed to scare not inform...

It's all about the Y-axis and that 'assumption'.

Taking a hard look at the graph's _hard data_ it shows the first month of war dropping the black curve just below recent past levels.
So big whoop...

Then there's the 'assuming no resolution' orange extension - heading for zero oil at top speed.
Except who thinks that there are no other oil suppliers in the world ?
Who thinks that the many world oil fields won't be cranking up production - now that the value of their output is up by 20%.
(Yes I know we're paying double - but the cost of crude is not up by that amount.)
The reason for OPEC's existence is to manage/restrict oil output - to keep the price up.
Who doesn't think that signifies excess world oil-production capacity.

So the orange line is BS - true only if you accept the silly assumption.

Where was the zero on the Y axis ?

Anyhow, using reserves to cover locked in and disrupted oil extraction works until it doesn't.

The drop off is gradual, then sudden.

Fanciful thinking does not deliver new supplies.

Neither side in the conflict can afford to give up now, the so called ceasefire is an opportunity to rearm for the next round .

Otautahi Christchurch

pdh

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Ultimate Geek
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#3490671 13-May-2026 21:40

>Where was the zero on the Y axis ?

A long long way away from the data shown.

That's a dead give-away that the data you are being shown may be interesting - but it's not startling.

Re-plot that graph with the Y-axis showing 0 to 8.
And the terrible drop now looks like a wiggle.

Graphing 101.

pdh

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#3490675 13-May-2026 23:03

>It's not merely about can the US pump out more oil. Can the US load that extra oil onto tankers?
>You don't typically build twice as much capacity as you need and then just let it sit idle.
>Source: can barely get enough budget to build the stuff that keeps the lights on. Double that? As if.

>But even if they could double their output and load it onto tankers, there are fewer tankers
>available to take it because a bunch are stuck on the wrong side of the Strait and the ones
>that can be used have to travel twice as far to get to Asia. If your tanker has to travel twice
>as far, then it can only carry half as much oil in any given time. Some tankers can take shortcuts
>through the Suez or Panama canals, but those are the smaller ones and there are traffic limits,
>especially on the Panama canal which has a water shortage.

Boy... you have swallowed it hook-line-&-sinker.

Get someone to list world oil production for you - in 2025, Iran produced a whopping 3%.
Irrelevant.

Yes, they are temporarily blocking Hormuz - which throttles _some_ shipments from #'s 2, 5, 8 & 10 on the top 10 list (Iran is #9).
So those countries pump 29% of world oil - and a hell of a lot of that isn't blocked (Saudi).
So nobody needs to 'double' anything.

Those worst hurt by this (aside from Iran) are China.
And the US is not devastated by that.

There are 7 to 50 tankers 'trapped' in the Persian Gulf.
By 'trapped' I mean 'can't get out' not 'are hanging round outside at anchor'.
By tankers, I'm interested in the VLCC or ULCCs - which do the heavy lifting globally.
There are 800+ VLCCs and 300+ ULCCs afloat - plus a few in Russia's dark fleet.
Can you show how that 1% trapped-behind-Hormuz is crucial ?

Not sure of your geography on your 'travel twice as far' - the Suez isn't blocked.

It feels like you're invested in the latest 'sky is falling' narrative.

SaltyNZ

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#3490699 14-May-2026 07:51

pdh:

Boy... you have swallowed it hook-line-&-sinker.

Get someone to list world oil production for you - in 2025, Iran produced a whopping 3%.
Irrelevant.

I wasn't talking about Iran. Iran is in any case sanctioned and mostly supplies China alone. I was talking about Iraq, Kuwait and Qatar who have no ports outside the Strait. Even the UAE and Saudi have major ports out of action, although UAE is lucky to have Fujairah and Saudi has a pipeline to Yanbu, but which cannot increase production enough to make up for it.

There are 7 to 50 tankers 'trapped' in the Persian Gulf.
By 'trapped' I mean 'can't get out' not 'are hanging round outside at anchor'.
By tankers, I'm interested in the VLCC or ULCCs - which do the heavy lifting globally.
There are 800+ VLCCs and 300+ ULCCs afloat - plus a few in Russia's dark fleet.
Can you show how that 1% trapped-behind-Hormuz is crucial ?

Not sure of your geography on your 'travel twice as far' - the Suez isn't blocked.

It feels like you're invested in the latest 'sky is falling' narrative.

That of the Russian dark fleet that manages to evade being intercepted and captured by the allies right now is being picked off by Ukraine (with the last one they openly claimed credit for being in March), but even so they don't make up the bulk of the total fleet. To the extent that they do, Ukraine is also pounding their refining, pumping and port facilities to ensure they can take as little advantage of the situation as possible. And I am well aware that the Suez isn't blocked, but as I already said, VLCCs can't use it. In addition to oil tankers there are also a bunch of other bulk cargo ships.

If I've fallen for a 'narrative' it's only because that narrative is being pushed by an ex-merchant-marine/now professor of history who explains how global shipping works. I think he probably has a handle on it.

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kingdragonfly

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#3490966 14-May-2026 18:14

From California, reported by several mainstream US news TV programs, that are not Fox.

USD $6/gallon is NZD $10.10/gallon

Currently NZD $12/gallon, based on the latest available NZ national averages.

California’s Six-Week Supply Cliff: The $8/Gallon Risk as the Strait of Hormuz Closure Tests a Fragile Fuel System

- California’s oil imports from the Strait of Hormuz were cut off, eliminating 30% of its supply and triggering a sharp price surge to over US $6/gallon

- Structural supply deficits, including 20% lost refining capacity and no interstate pipelines, force reliance on vulnerable maritime imports.

- High taxes and regulatory burdens amplify price shocks, with experts warning of potential $8/gallon prices if the crisis persists beyond six weeks.

- A fragile inventory and lack of alternative supply routes risk severe shortages, threatening major events like the June World Cup.

gzt

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#3490978 14-May-2026 19:24

kingdragonfly: From California, reported by several mainstream US news TV programs, that are not Fox.

USD $6/gallon is NZD $10.10/gallon

USA petrol at NZD$2.70 per litre = national disaster in USA

SaltyNZ

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#3490981 14-May-2026 19:33

gzt:
kingdragonfly: From California, reported by several mainstream US news TV programs, that are not Fox.

USD $6/gallon is NZD $10.10/gallon

USA petrol at NZD$2.70 per litre = national disaster in USA

Pretty horrific that that is what gets the Americans angry about a war, eh...

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Handle9

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#3490984 14-May-2026 19:37

SaltyNZ:

gzt:
USA petrol at NZD$2.70 per litre = national disaster in USA

Pretty horrific that that is what gets the Americans angry about a war, eh...

Is it any different in NZ? If it wasn’t effecting petrol prices would most New Zealanders care? There’s certainly very little interest in South Sudan and Yemen.

cddt

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#3491126 15-May-2026 06:05

Handle9:

Is it any different in NZ? If it wasn’t effecting petrol prices would most New Zealanders care? There’s certainly very little interest in South Sudan and Yemen.

Weren't you until recently a resident of a country which is supporting the belligerents and an actual belligerent respectively?

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#3491127 15-May-2026 06:07

pdh:

>Where was the zero on the Y axis ?

A long long way away from the data shown.

That's a dead give-away that the data you are being shown may be interesting - but it's not startling.

Re-plot that graph with the Y-axis showing 0 to 8.
And the terrible drop now looks like a wiggle.

Graphing 101.

It's graphed this way because it's showing the gap to the "operational floor". This is the minimum level of oil (or refined product) which needs to be physically maintained in storage to keep the system functioning normally.

SaltyNZ

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#3491147 15-May-2026 08:52

Two more tankers attacked outside the Strait. Unknown who attacked them but one was boarded and seized and is now heading to Iranian waters and the other, which sank, was not an Iranian ship. So I guess we'll never know. 🤷‍♂️

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wellygary

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#3491165 15-May-2026 09:39

gzt:
kingdragonfly: From California, reported by several mainstream US news TV programs, that are not Fox.

USD $6/gallon is NZD $10.10/gallon

USA petrol at NZD$2.70 per litre = national disaster in USA

Yes it would be, but California is not the whole US, and has always had much higher fuel prices than the rest of the country,

From 2025

average gasoline prices by state

Currently... in "most" parts of the Country its around $4.50 a Gallon, so still less than NZD $2/litre..

https://gasprices.aaa.com/

Handle9

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#3491211 15-May-2026 13:41

cddt:

Handle9:

Is it any different in NZ? If it wasn’t effecting petrol prices would most New Zealanders care? There’s certainly very little interest in South Sudan and Yemen.

Weren't you until recently a resident of a country which is supporting the belligerents and an actual belligerent respectively?

Your point is what?

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