BNY’s Bob Savage reports that renewed Iran–US tensions and evidence of tight US inventories are supporting Oil, with satellite data showing most Strait of Hormuz export facilities closed. Savage cites International Energy Agency (IEA) projections of $3.4 trillion sector investment skewed toward electricity and alternatives, with only $500 billion going into new Oil, implying ongoing supply constraints and significant implications for energy-intensive industries.

Geopolitics, inventories and capex mix

"The break in the uneasy truce, with more military conflict between Iran and the U.S., spelled gains for oil and USD higher, while stocks fell globally."

"Alternatives to the Gulf States are in the spotlight, placing the focus on the U.S. EIA report later today."

"Today’s IEA report sees $3.4tn being invested in the sector, given the second crisis in five years."

"$2.2tn is expected to go into electricity and grids, storage, nuclear and alternatives such as wind."

"The remaining $1tn is for oil, gas and coal, but with just $500bn heading into new oil – the third y/y decline in investment in crude."

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