Europe and Asia competing for LNG shipments with Hormuz blocked.
(Financial Times, Verity Ratcliffe and Nassos Stylianou, March 11, 2026)
Europe and Asia are urgently competing for liquefied natural gas shipments after the war nearly halted traffic in the Strait of Hormuz, blocking about a fifth of the global supply and diverting some ships bound for Europe towards Asia.
Asian countries, heavily dependent on Qatari and Emirati LNG transiting through the strait, saw prices spike immediately, prompting the rerouting of U.S. cargoes to the region to cover the needs of Taiwan, South Korea, and Japan.
Europe, having learned from the 2022 experience with reduced Russian gas, now has more contractual tools to discourage diversions and benefits from greater supply not tied to the United States, but prolonged closure of the strait risks turning the logistical disruption into a real gas shortage.
Ships change course towards Asia.
“In an indication of the growing contest for LNG since the start of U.S. and Israeli attacks on Iran, some gas carriers have changed course while heading to Europe and instead headed towards Asia, according to shipping tracking data analyzed by the Financial Times.”
Asia dependent on Gulf LNG.
“Most of the LNG produced in Qatar and the United Arab Emirates is normally shipped through the strait to Asia; Taiwan relied on Qatar for over 30% of its gas needs in 2025, while for South Korea and Japan the shares were 15% and 5% respectively.”
Europe better prepared than in 2022.
“Europe has learned from the 2022 experience and now has more weapons to fight in this extreme price scenario; buyers have inserted clauses in contracts that provide for much higher penalties if suppliers divert cargoes for commercial gain.”
Greater flexible supply from the U.S.
“Almost all U.S. exports can sail to any destination desired by the buyer; several analysts have noted an increase in some producers’ willingness to break contracts for financial advantage, making diversions more likely.”
Risk of real shortage with prolonged closure.
“The longer the strait remains closed, the greater the risk that the shipping disruption will turn into a real gas shortage, as ships cannot load and facilities have limited storage capacity.”
Aramco warns of ‘catastrophic consequences’ from war with Iran.
(Financial Times, Verity Ratcliffe and Leslie Hook, March 11, 2026)
Aramco plans to restore about 70% of normal crude exports within a few days, equal to 5 million barrels per day from the Red Sea port of Yanbu, bypassing the Strait of Hormuz blocked by Iranian threats.
The conflict has affected about 20% of the global oil supply, with Saudi Arabia, Iraq, Kuwait, and the United Arab Emirates forced to reduce production due to lack of storage capacity, while a drone attack set fire to the Ruwais refinery in the Emirates.
CEO Amin Nasser issued a warning about risks to the global economy, describing the consequences as “catastrophic” if the war prolongs, with “drastic” effects on energy markets and the global economy, echoing similar warnings from the Qatari energy minister.
Rapid restoration of exports from Yanbu.
“Aramco is working to quickly increase exports from the Red Sea port of Yanbu, allowing about 5 million barrels per day to reach the global market without crossing the Strait of Hormuz, which normally handles only a small portion of our shipments.”
Catastrophic threats for economy and oil.
“The Middle East conflict would have ‘catastrophic consequences’ for the oil market the longer it continues, as well as ‘drastic’ effects on the global economy, Amin Nasser said during the quarterly results conference call.”
About 20% of global supply affected.
“In total about 20% of global oil supplies have been affected by the conflict, with Iraq, Kuwait, and the United Arab Emirates reducing production variably due to the risk of exhausting storage capacity.”
Drone attack on Ruwais refinery.
“A drone attack caused a fire at the Ruwais refinery in the United Arab Emirates yesterday; the plant, which produces 900,000 barrels per day and is one of the largest refineries in the world, was forced to shut down.”
Oil prices highly volatile.
“Oil prices surged from about $60 at the start of the year to nearly $120 on Monday, the highest level since June 2022, then crashed sharply after Trump suggested the war could end ‘very soon’.”
Traders ride one of the wildest days ever seen in oil.
(Financial Times, Malcolm Moore, March 11, 2026)
Brent prices recorded the largest absolute intraday swing ever, jumping to $119 a barrel then crashing to $84 in just 23 hours, in a market shaken by the escalation of the Gulf conflict and conflicting statements from Trump.
Trading firm Onyx Commodities faced extreme volumes and spreads widening up to $10 a barrel, forcing traders to manage enormous risks with mistakes that could cost millions instead of thousands, in a chaotic atmosphere likened to a 24-hour video game.
Despite hopes for a quick end to the war, trader Manny Newman expects at least six to eight weeks to stabilize flows and two to three months of high prices, with reduced volumes, market breakdowns, and devastating losses for those short or unprepared.
Record swing never seen before.
“Brent price rose to $119 a barrel then plunged to $84, the largest intraday dollar swing ever recorded; for me, having lived through Covid, Russia, and the 2019 Saudi attacks, nothing compared to yesterday.”
Trading like a nonstop video game.
“The trading pace felt like playing a video game for 24 hours straight; we turned the meeting room into a motel with sleeping bags, drank electrolyte drinks, took creatine, and used nicotine patches to cope.”
Million-dollar mistakes instead of thousands.
“We are among the largest operators by volume in oil; normally a price error costs $10,000, yesterday it would have been like losing $2 million because there was no way to know where the market was.”
Emergency evacuation from Dubai headquarters.
“We spent the weekend evacuating 15 traders and their families and pets from Dubai; we rented an Airbus from Marseille, stopped in Rome to refuel, and arrived just in time for market opening.”
Devastating losses and teams fired.
“I heard a couple of funds fired entire teams after heavy losses in Monday’s volatility; some trading houses were short across the board and had a rough time, with short squeezes that can be devastating, in the billions of dollars.”
No quick return to normal in oil.
(Financial Times, Amrita Sen, March 11, 2026)
The effective closure of the Strait of Hormuz has reduced oil flows by at least 10 million barrels per day, nearly 2.5 times more than the initial estimated losses for Russian exports during the war in Ukraine, with further cuts of 5 million barrels per day of oil products and a blockade equivalent to about 20% of global LNG supply.
Brent price volatility exploded with swings of $35 in a single day, reaching nearly $120 a barrel before falling after Trump’s statements, but emergency measures such as releases from strategic reserves and energy conservation policies in Asia indicate the impact will not be short-lived.
Even in the case of a rapid ceasefire, the new status quo will not return to the previous normal: risk calculations for regional trade will change, Middle East vulnerability will remain high, and supply security will become a top priority for major Asian importers, reshaping oil markets for years.
Unprecedented loss of flows.
“Even accounting for diversions by Saudi Arabia and the United Arab Emirates, oil flow through the Strait of Hormuz has decreased by at least 10 million barrels per day according to our estimates. This is nearly 2.5 times more than the risk assessed for Russian crude exports in the early stages of the war in Ukraine.”
Extreme volatility and emergency measures.
“Oil price volatility has skyrocketed. The Brent benchmark swung within a $35 range on Monday, rising to nearly $120 a barrel over fears the strait would remain closed for long and then falling after Trump’s comments.”
Reserves depleted do not replace lost flows.
“Even if large releases from emergency stocks manage to curb price increases in the short term, they would not fully compensate for the loss of over 10 million barrels per day of flows, meaning the market will continue to test the U.S. administration’s resolve.”
New status quo inevitable.
“The biggest question for us is what the new normal will look like when it arrives. Clearly, it will not resemble the old status quo. It may be wrong to assume that after Iran implemented its long-standing threat to disrupt the Strait of Hormuz, returning to the previous regional trade status quo will be easy.”
Asia forced to rethink energy security.
“Supply security will return to the top of governments’ agendas in the new world order, just as after the Russian invasion of Ukraine in 2022. This will continue to reshape oil markets for a long time to come.”
Europe’s risky push towards private assets.
(Financial Times, Emma Dunkley and Alexandra Heal, March 11, 2026)
The European Union and the United Kingdom are opening access to private assets such as private equity, credit, and infrastructure to retail investors through evergreen funds, Eltif 2.0, and LTAF, with asset growth over 50% last year and forecast flows of 100 billion euros by 2028.
These products offer limited liquidity with periodic redemption windows and maximum thresholds, exposing ordinary investors to risks of illiquidity and uncertain valuation, just as similar funds in the U.S. have imposed permanent withdrawal restrictions and suffered significant outflows.
Managers and platforms emphasize the need for education and transparency to avoid mis-selling, recalling the Woodford case in the UK, while some experts fear retail investors will compete for high-quality assets traditionally reserved for institutions.
Democratization of finance or imminent danger.
“For German fintech Trade Republic, opening private assets to non-professional investors represents the ‘real democratization’ of finance, but the question is whether this push comes at the right time or during a period of danger for investors struggling to understand the real value and cash convertibility of these assets.”
Risk of mis-selling with many new entrants.
“‘Many operators are approaching the distribution of these products for the first time,’ says Steffen Pauls, founder and co-CEO of Moonfare, adding that ‘there is a risk of mis-selling’ when these tools are expanded to inexperienced retail investors.”
Bitter lessons from the Woodford case.
“‘Woodford is remembered as the story of a star manager fallen from grace, but the real lesson concerns the structure: an open-ended fund with illiquid underlying assets is a ticking time bomb. It works until it doesn’t, and when it fails it is the retail investor who suffers the damage,’ says Robin Powell, campaigner for transparency in financial services.”
Liquidity not guaranteed even in evergreens.
“‘The problems in the U.S. are a timely reminder that these products are not truly liquid. Investors must understand that even in open structures liquidity is not guaranteed,’ says Steffen Pauls of Moonfare, emphasizing that gates and limits kick in when retail investors move en masse.”
Education essential to avoid surprises.
“‘Liquidity risk is probably one of the highest for private investors. We are working with distributors to educate and ensure people fully understand the product features,’ says Dominique Carrel-Billiard, global head of real and alternative assets at Amundi.”
There is no easy way out of Trump’s war.
(Financial Times, March 11, 2026)
Trump’s wavering statements, first calling the conflict “very complete” then insisting on total defeat of Iran, reveal a reckless attitude towards a devastating war without clear objectives or a plan for the aftermath.
Despite U.S. and Israeli attacks weakening Iranian missile capabilities and assassinating key leaders, the regime shows no signs of capitulation and continues an asymmetric war of attrition with missiles and drones against Israel and Gulf allies, almost completely blocking traffic in the Strait of Hormuz.
Any outcome of the conflict leaves the Middle East more unstable: continuing risks a global energy crisis and electoral damage for Republicans, while stopping allows the weakened regime to claim survival as a victory, with no realistic prospects for a moderate government or peaceful transition.
Trump oscillates between ceasefire and total victory.
“For a moment this week Donald Trump hinted he was preparing a way out of the war against Iran. The conflict, the U.S. president said, was ‘very complete.’ As expected, his comments had a calming effect on the jittery energy markets.”
Continued contradictions in presidential messages.
“Once markets closed on Monday, Trump sent mixed signals again. The United States, he said, will not ‘let up until the enemy is totally and decisively defeated,’ adding: ‘We have not yet won enough.’”
Underestimation of consequences and the adversary.
“The administration seems to have underestimated the repercussions of the conflict it unleashed and failed to understand its enemy. Trump described the war, involving the largest U.S. military deployment in the Middle East since the 2003 Iraq invasion, as a ‘little excursion.’”
Iranian regime resists and counterattacks asymmetrically.
“If Trump expected the regime to capitulate under fire, he is proving wrong every day. Surrounded and fighting for survival, the regime is reacting in all directions, conducting a long-prepared asymmetric war of attrition.”
No painless way out for Trump.
“Continuing the war risks triggering a wider energy crisis with consequences for the global economy and, especially for Trump, endangering Republicans before the midterm elections. Stopping it will leave the regime wounded and weakened but able to claim survival as a victory.”
The economic consequences of the war.
(Financial Times, Martin Wolf, March 11, 2026)
The duration and intensity of the conflict between the United States, Israel, and Iran will determine the extent of oil and gas export losses from the Gulf, with scenarios ranging from limited short-term impact to an 8-9% reduction in global supplies in 2026-2027 if infrastructure suffers lasting damage.
A prolonged escalation could push oil prices to $150 a barrel and gas in Europe to €120 per megawatt-hour, with negative effects on growth, inflation, and purchasing power, particularly severe in poor countries and unpopular in the West where energy affordability is already a political issue.
Modern economies are less vulnerable to oil shocks than in the 1970s thanks to lower energy intensity, greater adaptability, and better inflation expectation anchors by central banks, making economic damage comparable to past crises unlikely.
Uncertainty about intentions and end of conflict.
“Trump said on Monday that the war will end ‘very soon,’ but not this week; two days earlier on Truth Social he wrote there will be no deal with Iran except unconditional surrender, followed by the selection of a great and acceptable leader, then bringing Iran back from the brink of destruction.”
Iran determined to resist.
“The Islamic Revolutionary Guard Corps responded to Trump that ‘we will determine the end of the war’ and that Tehran will not allow the export of ‘a single liter of oil’ from the region if U.S. and Israeli attacks continue.”
Most plausible scenario is ceasefire.
“A ceasefire, not peace, seems a plausible short-term outcome, largely driven by Trump’s concerns over oil prices; another possibility is a low-intensity war because Iranian weapons are depleted and ships might resume transiting the Strait of Hormuz.”
Worst case with lasting damage.
“In the third scenario of a three-month conflict with long-term capacity damage, particularly to Iran’s Kharg Island, an 8-9% loss of global oil and LNG exports is estimated, impacting 2027 as well and pushing oil prices to $150 a barrel.”
Main lesson on energy resilience.
“The most important lesson is the most obvious: we must reduce our vulnerability to shocks in fossil fuel availability; for almost all industrialized countries, except net-exporting U.S., the need to invest in renewables to decrease this dependence is clear.”
(Excerpt from the newsletter
Articoli correlati
The political traps of jeweler Roggero in Bollate
What is stirring in the political world over the Roggero case. Damato’s Scratches
Right-wing baton against loud antifa complaints. What will Meloni do?
The little shows here and there make one reassess Meloni, who has become bourgeois and …
I explain the UniCredit-Linde case between Germany, Russia, and London.
The legal geographies of the UniCredit-Linde case in Germany. An analysis by Luca Picotti, lawyer …
The closure of the Strait of Hormuz boosts the Panama Canal. Economist Report
The Panama Canal is experiencing a boom in energy traffic due to the crisis in …
