The Brent crude price chart per barrel, expressed in dollars, is always interesting, and this was the view from the FT last night:
The recent right-hand end of the chart is what you need to look at.
As I noted a week or two ago, the dollar price per barrel recently hit $100, and then it fell because, as ever, Trump claimed there was a deal with Iran at hand.
As ever, this was nonsense. As the New York Times reported yesterday:
A top Iranian national security official delivered a sweeping set of demands on Saturday that he said the United States must meet before the Strait of Hormuz can reopen to maritime traffic, throwing the fate of the critical trade waterway into question.
They added:
Mohammad Bagher Zolghadr, the secretary of Iran's Supreme National Security Council, issued a statement carried by state media laying out multiple requirements for reopening the strait. He called for the United States to lift its naval blockade and sanctions on Iran, withdraw the U.S. military from around Iran, pay war reparations and release frozen Iranian assets, as well as end attacks on Iran's allies in the region and threats against the country.
The US has not agreed to their terms.
Nor does any deal Iran might conclude with Oman include them.
So, why note all this? The reason is to suggest, as I have been forced to do many times over the last few months, that the market volatility around oil prices appears deliberate, even though the fundamental facts have not changed since 28 February.
The Strait of Hormuz is closed. Whether by the choice of Iran, the USA, or Israel does not matter. Nothing indicates it will open again any time soon.
The game of “will they, won't they” is being played by both parties, but the reality is that, whilst Iran holds the upper hand, as it clearly does, whatever our opinions on its regime might be, any announcements made by Donald Trump on this issue are largely meaningless, except to the extent that they create oil price volatility and the opportunity for traders in that commodity to profit.
The fundamentals remain the same. Whatever is said, oil is not going to flow out of the Gulf any time soon. Late last week, fewer than 10 vessels a day passed through the Strait of Hormuz. Before the conflict, the average was around 130 ships a day. The market is pretending that this figure will be restored. This, though, is nothing more than an illusion created to suggest that economic foreboding is unnecessary and that the stock market boom might continue.
There is just one problem with this claim that is being played out by both the US administration, or regime as it is properly called, and the financial markets, which is that the longer they keep up this game, the harder the crash will be.
We will bear the cost of this folly.
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Just to call corruption by its real name, crime, the liar-in-chief allows people to pay for advance view of his insider “information” on Lies Social, so they can get ahead of the game laying bets on the markets and add to their millions.
The criminality is staggering, but our media and government pretend it is politics.
Robert,
The real suckers are those who take the bets. Their fingers must be burned black.
It is important to note that the crude price doesn’t tell the whole story. Along with the crude price the crack spread, the refining margin, has also increased. This is because refining capacity in the gulf is unavailable, Ukraine has destroyed a lot of Russian refining capacity, and maintenance was deferred from earlier in the years as refineries attempted to meet demand then. The refinery maintenance is having to be done now, further reducing capacity. If there isn’t available refining capacity crude prices fall, even though the price of refined fuels continues to rise. This means the fuel prices we are paying is higher than the crude price would suggest.
Much to agree with
Whatever what one might call this, this is a serious situation not being treated seriously at all. It is really pathetic seeing the price drop when Trump opens his trap and think that such a market has such control over prices based on – what ’emotion’?
Again, how did we become such an un-serious society in the West? If the ancient Chinese rulers acknowledged how markets could create monopolies and were willing to control them, what the hell were we thinking when we allowed Neo-liberals to portray markets as rational data processors and allocators of resources?
I work with quantity surveyors on affordable housing schemes and they report fluctuations in prices all the time – oil is in everything these days – even in stuff that is helping to reduce carbon output. Fluctuations aside, the price trends are creeping up and this will only increase as inventories deplete. And bang goes our affordable housing programme.
Agreed
The market is not “pretending”. The WTI barrel price accurately reflects the availability of crude oil. China has massively cut imports, which is the main reason the global economy has not collapsed.
You should instead be paying attention to the crack spread. Markets have priced the availability of refined fuels correctly, which is why we are paying so much more at the pumps even though the crude price is only slightly higher than before the Iran conflict started. It is the destruction of refineries that is critical here, both in West Asia and Russia. This will take many years to fix.
https://www.forbes.com/sites/garthfriesen/2026/07/23/refining-stocks-soar-as-crack-spread-hits-record-high-in-2026/
I have often acknowledged that
You are missing my point
Richard
Since you seem to have access to the FT, I am told that there is an article from Gillian Tett about one U.S. firm switching its graduate programme to non-STEM (humanities!!) graduates because apparently the STEM lot have ‘alarmingly shallow ideas’!!
I know that you are busy and committed chap but…………..you know…………hint, hint.
I have sent you the article…
Now I will read it.
I got confused there for a moment, about “crack spread”. I thought it was about what people smoked in City toilets. My education continues at this amazing Internet School of Economics.
The price of oil, refined or otherwise are set on the whim of traders, it has nothing to do with supply and demand.
How do we know? Because they admitted it.
The price of oil was already rising rapidly in the quarter ‘before’ the Russian invasion as the market decided, and I quote, ‘a slight rise’ in demand in the Asian market’ was seen as an opportunity for some serious gouging.
Right now, and as it has for two decades, the USA has produced more oil than ever before, and more than it can use. Gas is largely exported, and along with fracking, (their glut was entirely down to traditional extraction – according to the US energy dept) means the USA is drowning in fossil fuels.
Yet, and despite other nations not in the slightest it reliant on Russia/Ukraine or the Straits, pumping out more oil than ever before, the US is paying high prices for petrol, and the taxpayer is paying massive subsidies to keep that price down.
Oil prices are global, and before and after the Ukraine invasion, the market was failing to reflect just how much oil and gas is pumped. If supply and demand bore any relation to the current production levels, conflicts not withstanding, then petrol prices and gas prices would crash – as major producers are producing more than we can currently consume.
The day that happens I will be happily watching Satan skate by…
Production is not the sole issue, although I think you overstate your case.
What type of oil matters.
And refining capacity even more so. You are ignoring that.
Its not ‘my’ case. The above post was simply statements from the US energy dept, comments from traders, and information pooled from the WHO.
As for refining, the implication that it’s not able to match output is incorrect. At least so says the head of Shells scientific dept – and, the US dept of Energy.
According to all the experts in the field (scientists that is) there is no reason beyond market manipulation for the current high price of fuel.
The refining problem is widely reported
Looking at the Iranian demands – it is almost as if they were designed to be rejected by tRump. This is not to say the demands per se were unreasonable, it was in the way they were expressed. Perhaps the expression was designed to satisfy the Iranian audience. Or, it is possible the Iranians are doing a “US hostages 2” – which scuppered the Carter administration – string things along, show that tRump is hopeless and see a Republican wipe-out in the mid-terms, which would lead to a US administration that was paralysed. That is my three ha’pennies.
It makes African despot corruption look like petty theft.
I wonder what Trump’s cut is?
But if Iranian oil is really blockaded they must want to get things moving again surely. Both sides are venal and mad – but both have the incentive to get it resolved.<p>
Not sure they think a hostage 2 scenario is feasible. <p>
You couldn’t make it up. Will we survive?
The existential question…..
Rather than fluctuations in Brent Crude prices what about the prices of refined fuels?
These are the figures that matter at the moment
I think both, and the differential, do.
The UK financial masters of the universe, the Holy City of London finance wizards, do not appear to be looking outside their individual silos.
Brent crude may have gone down but petrol at the pump in my area has gone up 7/9 p per litre over the last few days.
If the part of the problem is lack of refinery capacity it makes the closure of Grangemouth by Ineos look incredibly stupid or am I missing something?
You are not.
From California, I conclude that militarily, the current US regime has neither competence nor integrity. The regime does have Olympic grade competence in manipulating oil prices to the benefit of donor oil corporations and probably the Trump family. The result and perhaps the purpose of the war is to extract money from US taxpayers and shift the funds to Department of Defense contractors, like Raytheon, Boeing, Palantir, Lockheed Martin, Northrup Grumman, etc. military.com/dod-defens…. The amount requested by the administration is $1.5 trillion. That tells me that the intent is not to end the war, but to keep milking the American taxpayer cow.
The Guardian reports that Iran plans to keep Trump entangled in war until after the midterm elections. https://www.theguardian.com/world/2026/aug/07/iran-war-trump-midterm-ballot. It worked to destroy Jimmy Carter’s presidency in 1979.
Where does this go? This US Strategic Petroleum Reserve will suffer temporary, but not permanent, market/economic/consumer pain, starting about now, but certainly by first week of September.
In the UK and the EU, add loss of fuel to loss of crops.