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Andy Lipow, Lipow Oil Associates, weighs in on the Strait of Hormuz standoff between Iran and the U.S. Navy, and how this will impact gas prices for c...
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I ran they just won't stop making threats in the US navy.
They're not backing down either so -- in a company now from Houston this and we look about from a -- associates Andy.
This whole thing is really looking like it's heating up more more so ultimately what does this do for the price of oil out.
Well there's a lot of rhetoric out there and it's tending to support the price of oil as the market -- whether the straits are gonna be closed or not.
Which I think right now is a very unlikely scenario.
It's okay it's an unlikely scenario so let's just say -- let's play the other way let's just say that they're crazy enough to try something.
The push -- as far as they can.
What would happen if they if indeed that -- -- they took the next -- any follow through on these threats.
Well at the straits for close the consumer is -- Syria a rapid price rise at the pump we should expect.
Gasoline prices around five or six dollars a gallon and you could see some.
Shortages in various parts of the world until government's release their strategic petroleum reserves.
When -- -- say because this.
-- up 48 hours ago when -- when the Sabre rattling began.
Oil popped over a hundred bucks a very -- and the one.
Yesterday as an intensified oil pulled back.
So -- like because there's a lot of confusing -- ultimately -- the price can go if indeed this whole thing you know banded up in its worst possible conclusion.
Beyond this Andy what's driving oil -- why.
How come oil and gold is free falling everything -- -- associated with the dollar all commodities have pulled back a lot why has oil been so stubborn here and does this mean.
That if things turn around of the dollar went down a local actually break down go substantially higher.
Well the risen we're saying stable to higher prices and oil is because demand around the world continues to grow.
When we focus on the US our demand is rather flat to declining especially gasoline.
Which is down two and a half percent year on year but when you look at the rest of the world diesel demand -- what's really driving prices higher.
And we're just seeing that happen in Latin America.
Africa Asia places that people don't talk about very often.
So there is a real global demand story still to this that -- a lot of people I think to your point America's sort of overlook all the time they think it's the either OPEC.
Or or the guys down in Houston -- but there are other factors that that by the way.
I'm reading that we're gonna be exporter.
Big time net exporter of gasoline is that true.
Well that's not exactly so what actually has happened is we've become a net exporter of all petroleum products which include gasoline.
Distillate fuels up petroleum Coke asphalt things people haven't heard up.
Which is good news because the Gulf Coast refining sector has become like a manufacturing industry where were importing crude oil and exporting finished products.
Any so you know find out are sort talk about straight -- moves of the Ron Saber rattling really -- surpass five dollar six dollar a gallon gas.
You know that means possible double dip but the more important point -- even raising lately is that study Arabia is trying to.
A circumvent any moves by -- run nearby building its own pipeline.
And also there is regional pressures in countries like Kuwait along the Saudi Arabia with its pipeline to avoid -- that the Strait of Hormuz in the future.
Well Saudi Arabia actually has an -- pipeline that runs from the east side of that country to the west side where the Red Sea is.
And in the United Arab Emirates they are really within weeks of commissioning a new pipeline that would allow them to export all of -- crude awhile.
Into the gulf of Oman which bypasses the straits so actions -- are being taken.
The problem in Saudi Arabia is today if they would -- increase their production.
That gets exported through ports that are affected by a straight closure.
And they -- have a happy new year we'll talk to you and Swanee twelve.
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