I was reading the Hansard transcripts from the Finance Committee yesterday. The idea that Canada is safe from Hormuz disruptions because we produce oil is a myth. The Parliamentary Budget Officer (the independent watchdog for federal spending) regularly warns that global crude spikes rapidly drive up our national debt servicing costs. We export unrefined crude from the West but still import expensive refined products in the East. The government cannot simply drill its way out of an international supply shock.
Good point. Canada produces oil, but we’re still tied to global prices. When crude spikes, it ripples through everything... transportation, imports, and even government borrowing costs. Geography doesn’t shield us from global markets.
The big question for me is "even if the U.S. pulled out would the threat to Hormuz lessen?" Somehow I think not. The underlying religious battle means that Iran will wreak havoc until Israel is punished. In the meantime the U.S. will continue to self-destruct. This stress will prove far too much for an old man with dementia and other possible health issues. (not me, the guy in the White House!)
Jim, even if the U.S. stepped back tomorrow, the damage to shipping confidence is already done. Once insurers and tanker operators pull out, the Strait doesn’t magically go back to normal.
Scott, fair point. Right now markets are pricing in risk, not a full supply shock. If shipping stabilizes, oil settles. If it doesn’t, that’s when the match gets closer to the fuel.
I was reading the Hansard transcripts from the Finance Committee yesterday. The idea that Canada is safe from Hormuz disruptions because we produce oil is a myth. The Parliamentary Budget Officer (the independent watchdog for federal spending) regularly warns that global crude spikes rapidly drive up our national debt servicing costs. We export unrefined crude from the West but still import expensive refined products in the East. The government cannot simply drill its way out of an international supply shock.
Good point. Canada produces oil, but we’re still tied to global prices. When crude spikes, it ripples through everything... transportation, imports, and even government borrowing costs. Geography doesn’t shield us from global markets.
The big question for me is "even if the U.S. pulled out would the threat to Hormuz lessen?" Somehow I think not. The underlying religious battle means that Iran will wreak havoc until Israel is punished. In the meantime the U.S. will continue to self-destruct. This stress will prove far too much for an old man with dementia and other possible health issues. (not me, the guy in the White House!)
Jim, even if the U.S. stepped back tomorrow, the damage to shipping confidence is already done. Once insurers and tanker operators pull out, the Strait doesn’t magically go back to normal.
Good article Mr. Geezer! I don’t believe we have reached that point yet where the lit match nears the oil prices.
Scott, fair point. Right now markets are pricing in risk, not a full supply shock. If shipping stabilizes, oil settles. If it doesn’t, that’s when the match gets closer to the fuel.
I really appreciate the writing you are doing.Thank you
Thank you Andrea. Comments like that make the long hours of digging through reports worth it.
I remember the 1970’s Long Lines For Gasoline.
It wasn’t fun‼️