Irishman David Roche: “We are going to run out of fuel in the global economy, and the markets are in cloud cuckoo land.”

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Irishman David Roche see’s what’s coming:

“We are going to run out of fuel in the global economy”

“The markets are in cloud cuckoo land”

“We are moving beyond initial inflationary affects to the second stage where there is no gas to price”

“Within a few months we will be in an economy which has to adjust downwards to eliminate demand for fuel that’s not there”

Since the start of the Iran war…
Jet Fuel: +60%
Sulfur: +53%
Urea: +49%
Heating Oil: +46%
Diesel: +46%
Brent Crude Oil: +36%
Fertilizer: +35%
Gasoline: +35%
WTI Crude Oil: +35%
European Natural Gas: +33%
Palm Oil: +14%
Coal: +12%
Iron Ore: +8%
Rice: +6%
S&P 500: +3%
$VIX: -4%

Japan Asks Saudi Arabia for More Oil Supply

In a telephone call with Saudi Arabia’s Crown Prince Mohammed bin Salman today, Takaichi “expressed her appreciation for Saudi Arabia’s continued supply of crude oil to Japan via Yanbu Port even after the outbreak of the situation, and requested cooperation toward the expansion of energy supply to Japan,” the office of the Japanese PM said in a statement.

The Saudi ruler “expressed Saudi Arabia’s intention to respond positively in order to ensure energy supply to markets including Japan,” the Asian G-7 economy said.

Resource-poor Japan is heavily dependent on Middle Eastern oil supply and felt the supply crunch almost immediately as most supplies from the region remained trapped at the Strait of Hormuz unable to pass through the world’s most critical oil and LNG chokepoint.

We are facing the biggest energy security threat in history, IEA chief tells CNBC

“We are facing the biggest energy security threat in history,” Fatih Birol, the head of the International Energy Agency, or IEA, told CNBC on Thursday.

“As of today, we’ve lost 13 million barrels per day of oil … and there are major disruptions in vital commodities,” he told Steve Sedgwick virtually at CNBC’s CONVERGE LIVE in Singapore.

Birol has previously warned that the Iran war and ongoing closure of the Strait of Hormuz would result in “the largest energy crisis we have ever faced” and urged governments to bolster their resilience with alternative energy sources.

“I expect, first of all, nuclear power, will get a boost. … Renewables will grow very strongly — solar, wind and others — [and] I expect electric cars will benefit from this,” he noted. Alternative fossil fuels could also make a comeback, he noted.

“In some countries, I expect the coal may also see a push and go back up, especially in some big countries in Asia.”

The vital maritime passage — through which an average 20 million barrels of oil and petroleum products were shipped every day before the war — is currently under a “double-blockade” with neither Iran nor the U.S. allowing vessels to enter or exit the strait.

Describing the strait as one of the world’s “most critical oil transit choke points,” the IEA has warned that the closure will impact global economic growth, spur inflation and could lead to energy rationing. The agency has warned of an imminent jet fuel crunch in Europe, with some countries facing shortages within weeks.

“Europe gets about 75% of its jet fuel from refineries in the Middle East and this is basically now [down to] zero. … Europe is now trying to get it from the U.S. and Nigeria. If we are not able to get, in Europe, additional imports from the countries now, we will be in difficulties,” Birol told CNBC on Thursday.

“I really hope, first of all, that the strait is opened and refinery exports start from there, but we may well need to take some measures in Europe to reduce air travel as well,” he said.

Somalia just announced a ban on all Israeli-linked vessels passing through the Bab el Mandeb Strait.They made the move after Israel recognized Somaliland and sent an ambassador there. Somalia’s ambassador Abdullah Warfa said any Israeli ships trying to use the strait will face consequences.

Its a real announcement, but Somalia has almost no navy, so actually enforcing the ban is another story. Still, it adds more pressure on that key shipping route.