Mideast oil may soon have no way out amid ‘everything everywhere all at once’ wars, but the crisis in refined products is even worse

Fighting across the oil-producing world is catching up with energy markets, which could soon be choked off by multiple chokepoints and shortages.

Over the weekend, the U.S. and Iran have paused their attacks on each other in the Persian Gulf while they engage in diplomacy. Iran and Oman are also in separate talks to reopen the Strait of Hormuz.

But the U.S. and Iran’s neighbors are unlikely to accept any deal that recognizes Tehran’s control over the narrow waterway. Meanwhile, Iran-backed Houthi rebels are threatening ships in the Bab el-Mandeb Strait, which Saudi Arabia has relied on to export its oil and bypass the Strait of Hormuz.

Ships can get around the Bab el-Mandeb Strait by using the Suez Canal to enter or exit the Red Sea, but it can’t accommodate the largest oil tankers. There’s also a risk that Iran could try to strike the Suez Canal too.

“So we are starting to talk about the kind of no way out scenarios because of this new Red Sea unrest,” Helima Croft, head of global commodity strategy at RBC Capital Markets, Read Entire Article