$200 Oil and Impact on Global Economy | Rory Johnston and Jimmy Connor
Jimmy Connor Mar 13, 2026 54:29
Summary
The Strait of Hormuz closure removes roughly 20 million barrels a day — about a fifth of global oil supply — rivaling peak-COVID demand destruction.
Rory Johnston argues oil near $100 is firmly too low and sees the inflation-adjusted record near $200 as reachable this year if the closure persists.
Refined products are cracking first: Asian jet fuel spiked past $200 a barrel, and diesel cracks near $60 imply $150–$160 effective costs.
The IEA's 400-million-barrel release, the largest ever at roughly 3 million barrels a day, is a band-aid against a 15–20 million barrel daily loss.
Johnston is at his most bullish ever on near-term energy exposure, but warns energy stocks do poorly in the recession-or-worse conditions this crisis risks.
Rory Johnston's takeaways
- Top takeaway Argues oil near $100 is firmly too low given the Hormuz closure and expects a grind of $2–3 a barrel higher every day it persists.
- Sees the inflation-adjusted record near $200 a barrel reachable this year — possibly by end of April — if the strait stays closed two to four more weeks.
- Calls the IEA's 400-million-barrel release the largest in history but only a band-aid against a 15–20 million barrel a day loss.
- Says Russia is the war's biggest winner, with a year of sanctions pressure unwound in two weeks as every Asian buyer chases its barrels.
- Has never been more bullish on immediate energy exposure, but warns energy stocks don't do well in the recession-or-worse conditions a prolonged closure risks.
Jimmy Connor's takeaways
- Top takeaway Frames the episode around the investing angle, pressing the guest on whether the setup means investors have to be long oil and natural gas.
- Supplies market color: oil started 2026 near $60 and ran to about $100, and every $10 crude move adds roughly 25 cents at US pumps.