Unbelievable... it's official.
Following the Houthis' attacks on 2 Aramco oil facilities, production was halted, affecting 50% of Aramco's total production.... or 5.7 mbpd
Naturally, oil is down almost 9% on the day.
WTF?
Main Stream Media reporting of the war is effectively zero:
a) Saudi production was hit real hard in the recent days (never happened before).
b) Jordan King escaped to UK as the first of the royal families to defect.
c) Both Hormuz and Bob el Mandeb are closed to oil tanker transport (never happened before).
d) Almost all Russian oil tankers on water were bombed by Ukraine.
e) My guesstimate is that oil production/transport is now 30% less.
Covid was -10% but only for a few months.
1970s was about -15% for a decade.
We never had -30% for short or extended periods of time: new unintended extreme global experiment for economists, historians and climatologists, not that any one of them have the brains to recognize the MASSIVE ANOFUCKINGMALY playing out right now.
The counterpart of -30% less oil consumption is something like -10% (or more) global GDP drop, 10% (or more) climb in unemployment.
There could/will be some regional differences; China/Asia/EU will be hit very hard. US less so, in the short term. Eventually, we will all get screwed royally.
When? Tough to tell… sooner or later! Destination is clear.
Can it be avoided? I do not think so. Like... 0% chance, imo!
Is the oil price or financial markets reflecting any of this bleak future? Nope... everybody is on Disneyland. What are they drinking?
BREAKING: New high-resolution satellite imagery shows major damage to the Abqaiq oil processing facility, the world's largest crude oil stabilization plant processing 7% of global oil supply, and a massive black plume of smoke rising following drone attacks, per Sentinel-2
Top Lloyd's of London marine war insurers have told brokers they'll stop selling war cover for Saudi-linked cargoes in the Red Sea after Houthi attacks on two Saudi tankers, and some are preparing to cancel existing policies.
The exclusion covers any ship with "Saudi touchpoints," including foreign-flagged vessels that previously called at Saudi ports.
Saudi Arabia is now being lumped in with the US, UK, and Israel as high-risk jurisdictions — a serious blow given Riyadh's growing reliance on Red Sea exports via Yanbu (up to 5 mn b/d) while the Strait of Hormuz stays largely closed.
Several Saudi cargoes are already U-turning around the Cape of Good Hope, others are switching off GPS to sneak through Bab al-Mandab, and the Houthis say the "naval blockade" targets only Saudi shipping.
Source: FT
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