Rabobank’s RaboResearch team, led by Michael Every and Joe DeLaura, argues that the Iran War could accelerate a shift from unified Oil markets toward Balkanised pricing blocs. They highlight historical precedents of fragmented energy and FX markets, warn that energy may increasingly move via geopolitically constrained supply chains, and stress that this is a scenario analysis rather than a formal forecast.

From one price mantra to energy blocs

"Whether the US wins or loses the Iran War, energy supply chains are already moving because of it, and after it is over they are likely to shift significantly further – we are just flagging that Balkanisation is one of the risks ahead."

"As such, we may be moving towards a world where energy is not a fungible number on screens that flows to the highest bidder in a neutral global market, but a strategic asset that moves through geopolitically-constrained supply chains based on security pacts, payment currencies, and swaplines, as for large parts of the 20th century for many economies, and others as of today."

"We contend one geostrategic option the US could consider is to halt exports of refined products. Moreover, the US may respond to an extended energy crisis by corralling key energy producers and refiners into a closed loop --like the Soviet COMECON bloc-- within which they could enjoy abundant cheap energy, while others would risk seeing vastly greater shortages and price rises."

"The energy advantages of NAPHTHA are clear but it’s highly unlikely the US would abandon Japan, South Korea, and Australia/New Zealand for national security reasons. Even a grouping involving those net energy deficit economies has roughly balanced oil demand and excess LNG."

"Equally, if China wants to find a new CNY energy ‘stack’ for itself then it needs to source around 10.5 million barrels per day of crude. That’s around the total produced by both Saudi and Russia together."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)