What has the world learned from the conflict between the United States/Israel and Iran? For starters, a lot of energy flows through the Strait of Hormuz, among other important commodities that keep the global economy humming. But now that a memorandum of understanding is being implemented for peace, it appears that the United States will be looking to remove sanctions on Iranian exports, including oil.
That follows the American takeover of Venezuela’s oil industry, which has seen exports climb to seven-year highs of an estimated 1.25 million barrels per day. The Treasury Department has been making business with Venezuela easier for American companies by allowing direct flights to the country and by easing general licenses for American companies doing business there.
Now the Trump administration is planning an attempt at stabilizing Libya, where oil exports are below potential. The President’s advisor, Massad Boulos, is working to unite the various governments of the country and to bring new investment from American oil companies into Libya, potentially adding even more oil to global supplies.
With additional supplies potentially coming online, and normalization of energy flows through the Strait of Hormuz, the International Energy Agency believes supply will outpace demand in 2027. CNBC reports:
However, the IEA said supply is expected to surge by around 8 million barrels per day to roughly 110 mb/d, heavily outweighing a modest recovery in global oil demand of 2 million barrels per day to 105.3 million barrels per day in 2027.
“Our first look at 2027 balances shows a significant overhang emerging next year,” the IEA said.
Action Line: A global economy infused with energy has the potential to ramp up production and perhaps to do so without raising prices. Click here to subscribe to my free monthly Survive & Thrive letter.
Originally posted on Your Survival Guy.