Force Majeure Declared - Joe Blogs

[TexasTowelie]

The global oil market is starting to show signs of serious stress.

Several Middle Eastern energy producers have now declared Force Majeure, a rare contractual clause that allows companies to suspend deliveries when extraordinary events make supply impossible.

Shipping through the Strait of Hormuz, one of the most important energy chokepoints in the world, has slowed dramatically following attacks on tankers, drone strikes on infrastructure and escalating regional tensions.

As exports stall, producers are being forced to cut production because they simply have nowhere left to store the oil.

Some facilities have already been targeted, while others are shutting down as a precaution.

Energy analysts are now warning that oil prices could surge sharply if the disruption spreads, with forecasts ranging from $100 to as high as $150 per barrel.

History shows that supply shocks in the Middle East can have enormous consequences for the global economy.

In this video I explain:

• What Force Majeure means in the oil industry
• Which producers have already declared it
• Why storage constraints are forcing production cuts
• The risk to electricity supplies in Europe due to LNG disruptions
• And why some analysts believe this could become the biggest oil shock in decades