By Felicity Duncan
Continued rising petrol prices seem almost inevitable as America has successfully pressured China to ease off on its purchases of Iranian oil. It looks increasingly like we may be facing a fairly severe oil price shock unless something unexpected happens. On the one hand, we have lost a lot of supply from Venezuela, which is slowly imploding and sending floods of refugees fleeing across Latin America.
Now, with the Trump-led embargo on Iranian oil, millions more barrels are being cut from global supply. One safety valve that was in operation was the China/Iran supply line. China has been buying oil from Iran and was set to continue to do so despite American pressure. However, media reports indicate that China has started to cut back on its Iranian purchases, meaning that they’re going to be looking to Opec and other suppliers for the black gold they need.
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It all adds up to too many oil-hungry people chasing too little oil. Even if Opec decides to ramp up production soon, it’s not clear that they have enough surplus capacity to replace what has been taken out of the global rotation. Expect the petrol pump price to keep heading up.
In Premium today, you can listen to Alec Hogg interview SARS insider Adrian Lackay on Tom Moyane’s attempts to capture the revenue service. You can read all about the New York Times expose of how ANC politicians are hiring assassins to kill their competitors and you can learn why Tesla shares are rebounding in the wake of Elon Musk’s SEC deal.
