Global oil traders brace up for extended oil, LNG squeeze as hope fades for Iran war resolution 

• Global oil supply to fall 4.3mbpd full year – IEA says 

• Energy crunch to deepen as conflict drags on

Global oil traders appear to be bracing up for extended oil and LNG squeezes as hope is fast fading away of resolution of the Iran war anytime soon.

According to a report by OilPrice.com, the oil market is finally pricing in a prolonged Hormuz crisis, with flows through the strait down to roughly 11 percent of pre-war levels. Diesel and other refined fuels also face an increasingly severe squeeze, pushing crack spreads and consumer prices sharply higher.

The International Energy Agency (IEA), viewing the ongoing historic energy supply disruption, said it expects global oil supply to fall 4.3 million barrels per day (bpd) this year, inherently extending the energy crunch as the conflict drags on.

Since February till date, traders active on the commodity futures markets were mostly optimistic, taking every statement by President Donald Trump about peace talks or victory over Iran at face value; even betting on a speedy end of the war. However, all that hope appears faded now, as it has started to dawn on many that the trumped end-of-war is not happening.

As a result, the physical squeeze is already catching up with the global oil market.

Only recently, the Wall Street Journal (WSJ) reported that diesel shortage in the U.S that had been brewing since spring has now grown severer, and about to become severest, with autumn and winter demands expected to rise.

Other fuels are also about to witness the supply squeeze, because both the Middle East and Russia, which were significant refined fuel exporters are now in war emergencies.

Jeff Currie, an energy analyst, warned recently that Brent crude prices does not give one a clear look into the real crisis, which is in fuels. “Nobody on the planet…