Limiting Oil Exports Would Be a Mistake, McNally Says

Summary

Robert McNally discusses the extension of shipping waivers as a marginal help amid the largest oil disruption in history, the Strait of Hormuz blockade, and potential US export restrictions. He assesses Iranian storage capacity and the timeline for shut-ins, and expresses low probability of a ceasefire.

• Shipping waiver extension helps only marginally against the largest oil disruption in history (15% of global supply).
• McNally warns that export restrictions would be counterproductive and could worsen prices.
• The Strait of Hormuz blockade is effective due to US tracking across multiple oceans.
• Iran has inland storage that could delay shut-ins by one to two months.
• McNally sees a 20% probability of a ceasefire; expects Iran to wait for higher oil prices.
• Potential US military action to reopen the strait would take at least four weeks.