18 Mar 2026

🧠 The global oil market has split into two separate systems:

Asia: Paying very high prices (~$150+/barrel) US/West: Paying much lower prices (~$95–$105/barrel) T This as an unprecedented ā€œbrokenā€ market driven by geopolitics, not normal supply/demand. āš ļø Main Reasons Strait of Hormuz disruption: A major shipping route (ā‰ˆ20% of global oil supply) is allegedly blocked or restricted. Geopolitical tensions (Iran): Seen as the key player controlling whether supply resumes. Emergency reserves released: Large releases from global and US reserves are being used to stabilize prices. US reserves are described as historically low. šŸ“Š Key Effects 1. Two-tier pricing system Countries with domestic oil (like the US) are better protected. Import-dependent Asian economies pay much more. 2. Economic strain in Asia High oil prices → rising costs → factories slowing or shutting down. Early signs of ā€œdemand destructionā€ (reduced consumption due to high prices). 3. Shrinking safety buffers Strategic oil reserves may only last weeks at current usage rates. Limited ability to replenish during conflict. 4. Rising US fuel prices Gas prices expected to increase significantly if oil rises further. 5. Inflation risk Higher energy costs could: Push inflation back up Force central banks to delay or reverse rate cuts 6. Iran’s leverage Iran is portrayed as holding decisive control over supply routes. Ongoing conflict reduces chances of quick resolution. Source: zerohedge

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