中东与俄乌冲突致原油出口骤降，地缘风险溢价回归

Who these are have been relentless. They've been moving at this intensity of strikes against the Saudis for, um, for a few weeks now, and they've started controlling new portions of, uh, Yemen. And it looks like they're moving into the southern part of Saudi. I mean, it's hard to imagine that they would move into the southern part of Saudi, but that looks like their their aim and their intention. And so as we start to see that happen, um, you start to see a risk premium start to go back into crude again.

These latest strikes were on the airport. Um, before that, there have been a lot of strikes on, like you said, oil infrastructure and things like that. Why the airport? Why did the airport become a target? You to be honest, there's two conferences that are happening in Riyadh, um, today, this week, and then next week, uh, this week is the World Petroleum Council conference. And I assume this is, by the way, just an assumption.

And it is my speculation that they are aiming at the airport to encourage people to not go. I was supposed to be at that conference. I canceled last week on attending. Um, I know a lot of people haven't been able to make it because of the fear of flying into the airport. And so as they start to, uh, intensify against the red airport, people won't be able to get into Riyadh in order to attend these very, very large conferences that are supposed to happen this week and next week.

Um, you mentioned, uh, obviously the impact this is having on global energy prices. We also saw news out of Ukraine that it's going to continue its long range missile strikes against Russia. What is the global impact? And I guess specifically on oil as well, that these strikes that these actions are having, uh, on countries around the world. Yeah, the movement of I mean, there was the hopeful energy ceasefire between Russia and Ukraine, which, um, doesn't appear to be materializing.

And as Russia continues, as Ukraine continues, it strikes on energy infrastructure on Russia. You're really not going to have the ability for diesel prices to go down, because Ukraine is really has been really relentless heading, um, Russian refining infrastructure. And that's going to continue to keep refined products relatively, um, relatively high because you're not going to be able to get any of that refined product out into the global market, which is really where the shortages.

Um, crude inventories and crude, um, flows out of the Middle East have dropped significantly last we we kind of we print it two days, uh, with a two day lag so that we can gather all the information and, uh, flows out of the entire region where 11 million barrels a day as of October 10th versus, um, around the Arab, the seven day average is around 20 million barrels a day. So a pretty big drop in flows coming out of the Middle East region on crude and, uh, refined products.

Now, you were the head of policy and geopolitical risk. Um, these conflicts are conflicts you've been looking at for a while now. Obviously, Ukraine and Russia is years old, but even the conflict with Iran is now more than six months old. Is the risk meaningfully higher now than it has been before, or is it the same? Yeah. You know, when we talk about geopolitical risk premium, we really haven't had a geopolitical risk premium in oil prices since the Arab Spring.

So people could argue with me and say that the last risk premium was Russia, Ukraine in 2022. But I would argue that that actually wasn't a risk premium. We didn't lose any barrels from Russia, Ukraine, um, in 2022. And so this is really the first time we've started to see a significant drop in, um, oil and crude oil and refined products since the Arab Spring and the Arab Spring was in 2011. So this is actually a really, um, dramatic event.

And I think everyone, because the market has been so used to selling geopolitical rallies like this, that the market is now settling into this new normal in which a geopolitical risk movement is actually a buy. So any sell off is really a buy to the market. And we're moving into this new, um, regime of oil prices and product prices that we really haven't seen since, uh, prior to 2011. Michelle, I know you said that Russia may not actually have much diesel to spare.

How much additional supply can Russia realistically put, uh, onto the global market? Yeah. So if their refinery refining capacity remains where it's at today and they don't bring any refineries back online, then they maybe can push out 250,000 barrels a day of extra of the extra diesel. That's versus like their 750,000 barrels a day that they normally that they normally can export out. I also think that, um, that the risk there is because they export out of the Baltic Sea and the, the Black Sea, that you could start to see Ukrainian strikes on Russian tankers leaving.

And so it is also possible that we start to see an escalation in Russian and Ukrainian strikes against Russian tankers in the Baltic, in the Black Sea, as they try to export more diesel if they attempt to do it.