Matt Randolph: Forbes Global Energy Expert on the US Naval blockade on Iranian ports and the impact on global markets

High fuel prices could be on the way as Donald Trump's military blockade adds another element to the global crunch. 

The US Navy's obstructing shipping traffic around Iranian ports, with Trump threatening to eliminate any approaching attack ships.  

It follows both sides failing to broker a deal to end the war in Pakistan over the weekend. 

Forbes global energy expert Matt Randolph told Mike Hosking the physical price of crude is about US $30 a barrel more than what's reflected in the futures market. 

He says when the market catches up, and it always does, we'll see increases in gas prices and other inflationary items. 

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Episode Transcript

Speaker 1 (00:00):
So the strike blockade and where this gets this oils
back up over one hundred. Of course, WTI priced higher
than brinted game, which is interesting. We also got numbers
this morning that the show productions down in the goal
fifty three percent in the place, like q White forty
four percent in the UIE met Randolph's global energy expit
out of the States, and he's with us morning to you,
Good morning. What's the read on the market. I mean,

(00:20):
is this a means to an end? Do we know
where this is going and how it's going to work
or not?

Speaker 2 (00:26):
You know, currently the disparity between the futures market prices
and the physical price of oil, because you know, the
physical price of front crude is about thirty dollars a
barrel more than is reflected in the futures market, and
that's what companies actually pay for physical oil. And when
that futures market catches up to that physical market, it

(00:46):
always does, we're going to see significant increases in gas
prices and other you know, inflationary items. So that's really
what I'm looking at really closely right now.

Speaker 1 (00:57):
Worst is yet to come, as what you're telling us, yes, unfortunately,
is the alternative supply story. Trump's out there this morning
signing America's got more oil than it knows what to
do with. Just pocket ships here and we'll give you that.
Is that real or not?

Speaker 2 (01:12):
Now, that's not real. The United States is almost already
at its maximum export capacity, and we do have about
one hundred empty tankers headed to the United States. I'm
not sure what they're going to do except, you know,
maybe weight, because we're right there near our limit that
that we can actually export physically, like we're physically constrained

(01:35):
to our pipelines and stuff, so we can't add a
lot to that. Same way with natural gas, we're at
our limits. So we were already selling, you know, internationally
about as much as we could. So we are going
to set records, but it's not going to be a
huge increase, you know, percentage wise.

Speaker 1 (01:51):
What once you read on the Gulf, when I say
fifty three percent cotton production in qit forty four in
the UIE. Is that because it's damaged they won't be
able to get it back out, or because they were
full and they didn't need to produce anymore. Well, both,
it's both.

Speaker 2 (02:07):
It's it's probably half of each, you know, it's a
little bit of both. Their storage capacity is full, so
they can't produce anymore, they have nowhere to put it.
And in addition to that, you know, there is a
lot of damage which is shut down we're looking at
depending on the field in the country. You know, once
things do open up, a good sixty to ninety days
to get that production back going again. You have to

(02:30):
keep in mind the amount of time it takes ships
to get out of the straight of hor moves and
then unload and get back to it is a matter
of months, So it's going to take a long time
for that storage that's all you know, maxed out to
drop so they can open these these producing fields back up.

Speaker 1 (02:48):
What once you got on I mean, the stratap who
moves for the Gulf States is critical. That's their survival.
So it's got to work, will it?

Speaker 2 (02:59):
It will? And honestly, you know, oil and gas prices
are the biggest discussion right now, but what I'm really
concerned about is food prices and food shortages. You know,
looking out four to six months from now, with a
huge loss of fertilizer and nitrogen that we've lost from
there in other countries now like China's They're not going
to export any more fertilizer. Russia is not. That's my

(03:21):
big concern for the future. I'm hoping this all works
itself out, but it's going to stay with us for
a long time, a lot longer than their suggesting.

Speaker 1 (03:29):
Matt good insight, I appreciate it. Has always met Randolph
otherwise known as mister Global of course global energy Expert.
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