Demand for crude oil worldwide is expected to fall as higher gas prices amid the Iran war force many consumers and businesses to reduce their consumption, according to the International Energy Agency (IEA).
“Elevated fuel prices are putting further downward pressure on oil use.”
The price of crude oil is set worldwide based mostly on expectations for demand and supply. The price consumers pay for gas and diesel at pumps typically reflects changes in global oil prices.
If demand for oil and gas falls, prices often fall as a result.
Since the Iran war began, Canadians have paid higher gasoline prices at retail compared to before the war began because global oil supplies have been strained.
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Trump says Iran should pay compensation for people killed in previous conflicts -
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Business Matters: Oil prices rise as doubts grow that Strait of Hormuz will reopen -
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Trump reportedly says US is “low-keying it” with Iran war -
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Iran, Oman close in on Strait of Hormuz agreement, ship routes established -
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Hope renewed for Strait of Hormuz’s reopening
About a fifth of the world’s oil supply hasn’t been able to make it to markets because the narrow Strait of Hormuz shipping channel continues to see severe restrictions on cargo traffic for fear of attacks by Iran.
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Negotiations have been tense between the U.S. and Iran since the conflict began, and a tentative peace agreement that saw most of the fighting briefly stop in June quickly unravelled.
Iran now says it will not allow any ships to pass through the strait until the U.S. meets its demands, including financial compensation for what it claims are damages from the war.
The price for U.S. crude oil, known as West Texas Intermediate, was hovering around US$81 as of publication, down from $83.50 on Wednesday, and up from $75 a week earlier.
Changes in consumer gas prices typically occur in the days after crude oil prices fluctuate.
CAA says the national average price for regular-grade gasoline in Canada is about $1.68 per litre as of Thursday, up from roughly $1.53 a week ago and nearly 35 cents higher than a year earlier.
The federal government temporarily paused the fuel excise tax in April, which brought some immediate relief to consumers, but that could change when the plan expires next month.
The longer gas prices remain above normal levels, the more consumers will feel financially strained.
This means that although gas prices are higher than they would be without the Iran war’s effect, if consumers and businesses can’t afford fuel at those prices, then that leads to a perceived drop in demand.
If demand falls, then prices typically do as well, but that’s only if there is enough supply available to meet that demand.
There may be enough oil to meet a drop in demand in the near-term, but with global supplies strained amid the conflict in the Middle East, things could change if demand increases.
“Global oil supply rose by 2.4 mb/d to 101.5 mb/d in July, but remained 6.3 mb/d below year-ago levels, with 8.3 mb/d of Gulf output still shut in,” says the IEA.
“After some brief respite in June, global observed oil inventories plunged by 69 mb, or 2.2 mb/d, in July, dragged lower almost entirely by a drop in oil on water.”
This also comes as the strategic U.S. stockpile of crude oil fell this week to the lowest level in more than 40 years.
“Risks remain substantial and the urgency of reopening the Strait has increased, as previously available inventory buffers are rapidly depleting.”
The IEA says that although global demand will drop for most of the second half of this year, demand is projected to increase by 2.4 mb/d in 2027.
Hey you stupid bastards, oil demand is about to go up. Winter is just around the corner.
I suspect Mathew’s is a bot with the purpose of burying meaningful posts below.
Another Trump legacy. Congress needs to tell him “YOU’RE FIRED!”.
golly mathew is on a role, he needs to find a job, or purpose in life
Well Mathew, my first response is , how did you manage to post so many comments?
I will post once or twice a week , sometimes just posting TEST. I will be told I am posting to quickly and my comments will be stripped away.
I will respond to your comments about the general population and their understanding or use of math. It is unfortunate that more of us don’t understand it or use it to inform their decisions. But many people’s brains just don’t work that way.
Is it better to let math or your emotions dictate your decisions? I feel there is no right or wrong answer. but a dialogue between both systems is essential for human success.
Why are my opinions censored so often? I don’t know. Is this offensive?
I post as Wayne Kerr.
But if you don’t know basic arithmetic because a few sitcoms drove that into you…
Well, if you act now, I know a guy in…
The power of the state against the individual, is a ratio that could be expressed, and this is the greatest beauty of it all, it is a ratio like a hockey/basketball score…it is a fraction, like earning time and a half on a holiday…it is a decimal or rational number, or percentage. Every number can be expressed each way.
This is where media, politicians, business and individuals in general may take advantage of data analysis to misrepresent reality by twists of various adjectives.
The one we all need to, and many claim to, have the power to see. When a transaction feels suspicious, it is generally a ratio that is out of place.
Music, when deconstructed at every level, is math.
Everyone will say they cannot keep a beat and while there are people livingly within the spectrum of fully average racoon to Jimothy, the overwhelming majority of us just need to see a profile picture of a foot flat on the ground or with toes pointed on the highest angle they can be, on average, while the heel of the foot remains planted, visually break the distance between collapsed or vertically extended to full, 3/4, 1/2, 1/4, 1/8, 1/16 and so on.
Math and logic are visualized results. When they are not, we call it theoretical, and fair, if that moves beyond you.
Goldfish, if presented with more food than they are capable of eating might eat until they die.
A human, can look at any object and understand how to break it up proportionately, and therefor, not consume themselves to death.
Yes, there are rare instances in the grander scheme of the billions of people humanity represents but it represents a number that is likely smaller than most people can comprehend.
Not knowing basic arithmetic (language) or mathematics, (quantitative knowledge), is indeed a hindering to prosperity for all lacking it.
Beyond algebra (basic reasoning skills), that media tell you is too tough, fractions is the next up arithmetic even though it is again, music and is of the most understood of them because it is your paycheque and whether you are on time, late, or ordering a pizza way too big for yourself, or too small for everyone.
It is not tough. Again, needed for any logic or ideology to exist.
Humans get this without education, when it is thrown in their face…5 against one is unfair, right?
Our society needs to reclaim critical thinking because it is clearly lost and/or detached from the reality of what it is.
Any guesses as to what maths people consider talent vs knowledge?
Music, right? Harmonics, and what would become instruments, was one of the first sciences.
We can all appreciate a tune for words that are mathematical terms…but we hate math because the media told us to.
Oh, and I am afraid arithmetic and mathematics are quite easy to learn.
Math is human nature distilled into numbers and formulae. Algebra, is not a misunderstood phenomenon and indeed, in a sense, math’s used algebra before it had an official name. But wow did the explanations of it transcend what we had before.
Literally, some countries with different languages use slightly different phrasing, but mathematics is universal. It is integral to the human condition.
Yet media tell us to hate math.
Hint: it is because if you know and are comfortable with arithmetic and maths, people are less capable of lying to you successfully.
Maths are the building blocks of our thoughts and by extension, define our every logic.
I heard liberals think I might be swayed by using vague unquantifiable terminology like “many”, or “obsessed”. Like, “obsessed with guns”, or something similar.
Just a happy reminder that study you quote is ages old misinformation.
Canadians, in terms of University educated, actually rank quite low in number in comparison to similar economies.
You heard the stat; “most educated”, and again failed to exhibit those critical thinking skills most associate with highly educated populations.
To be clear, I analyze only the quantifiable and give little to no credence to the vague or qualitative opinion.
Because, I actually know more than parrot trolls, which is not to say I am a genius, or perfect. I simply can no longer identify as liberal as it has become synonymous with gullible nitwit.
Will humanity survive? Almost certainly. Will it be forced to adapt to reality? Definitely.
Can we fight for our survival? Yes. Can we rely on the world never changing to our detriment? No.
We need to remove the conversation around climate change from the people that fear change. Change is as inevitable as the next glacial maximum.
No, I do not trust a science that puts weight in scientific models that assume 38% variances.
Or, more likely the demand for oil is lower because everybody is buying less stuff over all. We’re already broke.
New York was supposed to be under 2 meters of water in the early 2000’s. Oil was going to be depleted, and the air was going to be unbreathable. That was the hot topic of discussion during the 1990’s when I was in school. When that didn’t pan out they used cloud seeding to cause offshore rainfall to encourage droughts and hired climate change nuts to start fires.
These ‘official’ predictions always seem to turn out wrong. Those of us elder millennials remember being scared by well meaning teachers telling us that the world would completely use up all of its oil reserves shortly after the year 2000.
Just to tease out some more potentially relevant history, during the 70s crisis, to save on fuel charges, Ontario milk producers removed solid containers and switched to bags, allowing for more product to ship at the same cost.
This, very human inventiveness, is more likely than committing billions in infrastructure and up front investment to convert business fleets, though I have no doubt governments will indeed put the cart before the horse as that is what they always seem to do best.
13%. Right? Please explain this investment strategy where I pay evermore for carbon while reducing my reliance on it.
Let us bring up a historical fact to set the right tone…
There once was a time a government created a fee/tax, on single use plastic grocery checkout bags totalling 5 cents per bag. A new government that opposed the tax got rid of it, but guess what? Businesses saw customers were willing to pay the 5 cents, so even though the government no longer mandated it, businesses chose to keep the fee.
So, we are paying a tax, that once instituted and paid for, both is inflation, but becomes permanent regardless of what future governments do, and the automatic hikes do not even prompt debate on spending, no different than the automatic pay raises MPs voted themselves to receive and cannot deny.
Ever hear of dirty cops that are ultimately recruited through intimidation when identified? It has been the source of many a film based on a true story…c’mon, admit it, this is that.
To continue…
It has sorta of maybe banned single-use plastic straws and plastic grocery checkout bags, but again, without thinking of a more viable alternative to consider it a success.
These people’s egos could swallow the black hole at the centre of our galaxy.
So, I think that is quite the stretch and I wonder what happened to the “who, what, why, where, when, how” type questions no one seems to have been taught or just abandoned.
Consumers like you and I (see: not government, business or industry), account for approximately 13% of gas consumption in Canada. This was derived by asking the questions how, what, and why.
So, even if all of us switched to EVs overnight, which is fantasy or fetish over reality, it might amount to less than ~1/8th of our dependence.
Of course, that will never happen. What will, might appear similar to when car manufacturers went from not concerning themselves at all with fuel efficiency to it becoming a ubiquitous marketing strategy amongst them all.
So, 50-100 years depending on whether you want to start with the it’s oil crisis or not.
Of course, our not-at-all-authoritarian government believes it can force this within 4-9 years to achieve, remember, a maybe 13% reduction.