by Michael Snyder, The Economic Collapse Blog:
Unless some sort of a miracle happens, the world is facing a severe energy supply crunch in the months ahead. Since the war with Iran began, we have been able to function normally because we had huge inventory buffers that we could rely on. But now those inventory buffers are nearly gone, the Iranians have been attacking commercial vessels in the Strait of Hormuz, the Houthis are preventing Saudi tankers from getting through the Bab el-Mandeb Strait, and the Ukrainains have been relentlessly attacking Russian refineries. As a result, we are potentially facing a very difficult winter.
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Most people do not understand how dire things have become because they are still operating as if there was no energy crisis at all.
The reason they have been able to do that is because we had extensive inventory stockpiles, but now those stockpiles are “largely depleted”…
At the start of the war in late February, countries relied on strategic oil reserves to mitigate the worst impacts of an energy supply crunch. Those stockpiles are now largely depleted, stripping the market of its key shock-absorbing cushion.
At this moment, the world is running an oil deficit.
But we can only do that for so long.
Once the stockpiles get to zero, oil prices will go “a lot higher”, and we are being warned that the clock is ticking…
“Our view, at a high level, is that we are in a crisis,” said Merritt Point’s Baird. “One that we have prepared for with very large inventory buffers, but the clock is ticking, and the challenges introduced this week with the potential disruption of Bab el-Mandeb just pull that much harder on the finite buffer.”
In addition to blocking Saudi vessels from traveling through the Bab el-Mandeb Strait, the Houthis are also hitting Saudi oil facilities…
Ship traffic through Bab el-Mandeb fell on Sunday after Yemeni Houthis attacked Saudi oil installations along the Red Sea coast, while transit through the Strait of Hormuz stayed low over the weekend, shipping data from Kpler showed on Monday.
Eleven commodity vessels passed through the Bab el-Mandeb strait on Sunday, the lowest level in months, the data showed.
We aren’t hearing about this a lot in the western media, but serious damage is being done by the Houthis.
In fact, Aramco’s Jizan oil refinery continues to burn two days after it was originally struck by ballistic missiles…
A 77 kilometer smoke trail indicates that the damage that has been done to that facility is quite extensive.
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