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5 min readThe oil price that doesn't believe its own crisis
Brent crude passed $125 a barrel this week, its highest level since 2022. Yet as Mathieu Favas, The Economist's commodities editor, put it: "If you look at oil prices, you wouldn't really believe that we are on the brink of energy apocalypse." The Strait of Hormuz, through which roughly a fifth of global oil consumption flows, is blocked. Before the war, about 18 million barrels per day—18 percent of global supply—passed through that chokepoint. Adjusted for diverted pipeline flows and production increases elsewhere, the deficit stands at roughly 13 million barrels per day. That is "the largest petroleum supply disruption in history," far exceeding the roughly 3 million barrels per day that were at risk when Russia invaded Ukraine in 2022. Yet petrol is only a bit pricier, plane tickets cost a little more, and most people still drive. That feeling of normalcy, Favas warned, "is quite misleading."
The buffers that bought time
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What you'll learn
- 1 (02:10) **Oil Prices Hit Highest Since 2022, But the Market Isn't Panicking** - The episode opens with the puzzle: Brent Crude passed $125/barrel and the Strait of Hormuz is blocked, yet oil prices are lower than during the 2022 Russia-Ukraine crisis, creating a misleading sense of normalcy.
- 2 (04:22) **The Three Buffers Masking the Shock** - The explanation begins with why a "day of reckoning" hasn't arrived, detailing the temporary cushions absorbing the historic supply loss.
- 3 (06:40) **The Coming Price Rationing** - Favas explains why the current calm is temporary and dangerous, predicting that prices will eventually have to rise much higher to force consumption to contract.
- 4 (07:21) **The Puzzling Asymmetry of Financial Markets** - The transcript explores a key paradox: why futures prices are lower than the physical reality suggests they should be.
- 5 (09:06) **The UAE’s OPEC Exit in Context** - The segment clarifies the immediate and long-term implications of the UAE leaving the oil cartel.
- 6 (11:20) **France’s Wide-Open Presidential Race** - The podcast shifts to the French election, framing the core question: who will oppose the rising populist right after Macron is term-limited?
- 7 (13:08) **The Problem of a Divided Opposition** - The explanation details why the anti-populist vote is so fragmented.
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Show Notes
Oil prices are at their highest since 2022, as a swift end to the Iran conflict proves elusive. Yet, our commodities editor says, markets do not yet yet recognise how deep the supply shock is. Who will contest next year’s pivotal election in France? And great expectations in Brazil ahead of the World Cup.
Watch “The Insider”: How high will the oil price go
Guests and host:
- Matthieu Favas, commodities editor
- Sophie Pedder, Paris bureau chief
- Jon Fasman, senior culture correspondent
- Rosie Blau, host of “The Intelligence”
Topics covered:
- Oil, Brent crude, OPEC, Iran, UAE
- France, Macron, Marine Le Pen, National Rally
- World Cup, Brazil, Pele
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