Steven Schork

Schork states that with the current disruption continuing for three more weeks, the path for oil prices is higher towards his "second-tier envelope" of $130-$134 a barrel. He notes strong buying interest from Asia/Europe and that U.S. prices are now catching up to global prices. The closure of the Strait of Hormuz has created a physical supply shortage. The extension of hostilities means this shortage will worsen over the next few weeks, forcing buyers to bid prices higher, especially for available U.S. crude. The fundamental setup of prolonged physical disruption, strong global demand for available barrels, and the widening arbitrage support a bullish, higher-for-longer price outlook. A swift, unexpected diplomatic resolution that reopens the Strait much sooner than anticipated.

Fertilizer prices will increase because natural gas is a key input, and the disruption in natural gas markets will drive up costs for fertilizers, contributing to food inflation.

44% of global LNG supply has been sidelined by the conflict and will remain offline for 3-5 years, turning the natural gas market on its head. This supply shock will have severe knock-on effects, driving up fertilizer costs (leading to food inflation) and disrupting helium production, which is critical for AI expansion and chip manufacturing.