@jolyonPhilip Pilkington's read on the Iran war is that the real failure wasn't letting an energy shock through. It was refusing to admit one was coming. A massive slice of the world's oil supply is already offline, and his case is that prices should have climbed slowly, giving households, businesses and freight networks room to adapt before the barrels themselves ran dry. What happened instead, he says, is that Washington kept a lid on the market for weeks to buy time. "They made the thing a cliff edge." France is already reporting fuel shortages. Flows of Saudi oil into Europe are getting squeezed. Shortfalls of diesel, gasoline and jet fuel are starting to ripple through the broader economy. Diesel is the one to watch, because the trucks, the ships and the freight trains all depend on it. When fuel can't reach those vehicles, goods can't reach shelves. Pilkington's prediction isn't an ordinary recession. It's the pandemic supply chain mess all over again, with one key difference: "This is physical shortage." Lockdown regulations could be lifted overnight. You can't regulate more oil into being.

@jolyonPhilip Pilkington's read on the Iran war is that the real failure wasn't letting an energy shock through. It was refusing to admit one was coming. A massive slice of the world's oil supply is already offline, and his case is that prices should have climbed slowly, giving households, businesses and freight networks room to adapt before the barrels themselves ran dry. What happened instead, he says, is that Washington kept a lid on the market for weeks to buy time. "They made the thing a cliff edge." France is already reporting fuel shortages. Flows of Saudi oil into Europe are getting squeezed. Shortfalls of diesel, gasoline and jet fuel are starting to ripple through the broader economy. Diesel is the one to watch, because the trucks, the ships and the freight trains all depend on it. When fuel can't reach those vehicles, goods can't reach shelves. Pilkington's prediction isn't an ordinary recession. It's the pandemic supply chain mess all over again, with one key difference: "This is physical shortage." Lockdown regulations could be lifted overnight. You can't regulate more oil into being.