{"id":91851,"date":"2026-04-23T07:19:39","date_gmt":"2026-04-23T06:19:39","guid":{"rendered":"https:\/\/www.taxresearch.org.uk\/Blog\/?p=91851"},"modified":"2026-04-23T07:19:39","modified_gmt":"2026-04-23T06:19:39","slug":"lets-get-real-about-oil","status":"publish","type":"post","link":"https:\/\/www.taxresearch.org.uk\/Blog\/2026\/04\/23\/lets-get-real-about-oil\/","title":{"rendered":"Let’s get real about oil"},"content":{"rendered":"

As The Economist noted<\/a> yesterday:<\/p>\n

\n

To gauge how close the world is to energy catastrophe,\u00a0The Economist<\/i>\u00a0has gathered a dashboard of indicators. It suggests that grave damage has already been done. Worse, without a reopening costs could soar, triggering events that cause the fuel system to seize up. A reopening of the strait now would\u2014just\u2014avoid a complete disaster. But some additional pain is already inevitable.<\/p>\n

Three factors are pushing the world towards the cliff edge. Oil cargoes available to buy are drying up. Refineries are slashing output of fuel. And demand remains artificially high, especially in Europe. Something big must give somewhere large for energy markets to balance.<\/p>\n<\/blockquote>\n

They added:<\/p>\n

\n

[M]odelling ... for The Economist<\/i>\u00a0shows that European stocks will fall precipitously if Hormuz flows do not normalise by June.<\/p>\n<\/blockquote>\n

So, what is this all about?<\/p>\n

First, as The Economist notes,\u00a0 the global energy system is not adjusting smoothly through price signals, as orthodox economic models suggest it should.\u00a0 Instead, market demand is being propped up by policy intervention, most especially through short-term inventory depletion. Politicians are maintaining the pretence that all is \"normal\".<\/p>\n

This creates the risk of a sudden and disorderly adjustment when physical shortages can no longer be masked. When that happens, there might be what The Economist calls a systemic \u201cseizing up\u201d of energy markets.<\/p>\n

And as they already note, the burden of adjustment is already falling unevenly, with poorer countries and sectors facing rationing and shutdowns first, while wealthier regions in the world and wealthier groups are seeing delays in the impact of this change because of the impact current fuel supply policies in many countries, including, to some degree, in the UK, most of which are avoiding the rationing we need.<\/p>\n

The reality is we need fuel rationing, and we need it now.\u00a0Our politicians are failing us very badly, February 2020 style, by pretending otherwise, and when reality hits, as it will, as there is no end to this war in sight, as I note this morning<\/a>, things are going to get very uncomfortable indeed.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

As The Economist noted yesterday: To gauge how close the world is to energy catastrophe,\u00a0The Economist\u00a0has gathered a dashboard of indicators. It suggests that grave
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