The damage inflicted on global energy infrastructure during the Iran war could have consequences lasting well beyond the conflict itself, according to veteran energy analysts Paul Sankey and Arjun Murti, who joined Erik Townsend for last night’s ZeroHedge Debate.
An oil tanker unloads crude oil at a crude oil terminal in Zhoushan, Zhejiang province, China July 4, 2018. Picture taken July 4, 2018. REUTERS/Stringer/ File PhotoSankey predicted that 2028 crude futures will see large moves upward as markets adapt to the reality that refinery capacity will not recover anytime soon.
Townsend fears that not only will 2028 prices rise… but that the globe may face a decades-long shortage of refined oil products, a risk he thinks people are not taking seriously. Murti meanwhile, in light of these realities, thinks “cash is king” for those weary of volatility.
Below were some highlights from the discussion though we highly recommend the full conversation for those who missed it live:
Could Refinery Damage Take A Decade To Repair?
"If you kept blowing refineries up around the world, you'd get to the point where we just don't have enough refining capacity to run the planet, period."
So what if the conflict drags on for years? Townsend asked:
"How far does this have to go before we get to the point where we look back on $60 crack spreads and say those are the good old days before we got to $200 crack spreads?” Crack spread being the difference in the price of crude and the consu
