Jeff Currie, Chief Strategy Officer of Energy Pathways at Carlyle Group LP, stated that the Middle East oil shock could drive "precautionary demand" of 2 to 3 million barrels per day over the next three to six months as buyers hoard supplies.
Currie noted in a report that hoarding activity "may have already absorbed any remaining 'oil surplus' inventories."
Although oil's share of the global economy has steadily declined since the 1973 oil crisis, it has become increasingly "irreplaceable" in functional terms and is now considered a "rare earth in the macro system."
"The remaining crude oil cannot be substituted: petrochemical feedstocks, aviation fuel, grid peak shaving, and fertilizers all depend on it," Currie explained.
"The world is no less vulnerable to an oil crisis today than it was in 1973."
"As long as the Strait of Hormuz remains blocked, policy measures are unlikely to prevent crude oil prices from rising."
"Traditional economies and asset-intensive industries are well-equipped to handle both expected and unexpected inflationary shocks."
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