(Financial Times, April 15, 2026)
Oil from the Gulf takes up to 45 days to reach its destination. This means that the last tankers that left before the United States launched the war against Iran 45 days ago are now arriving, with very little else coming in. With the expected scarcity turning into real shortages, it is time for governments, businesses, and individuals to reflect on what it really means to “run out of oil.”
At the moment, the risk of running out largely depends on where you are in the world. Countries particularly dependent on the Gulf for oil and refined products – especially in Asia – are the first to suffer. This group includes South Korea, India, Malaysia, and Singapore. Stocks can cushion the blow to some extent, but on average they cover only about one month of demand.
Many Asian countries have therefore begun experimenting with demand containment measures: remote work for public employees, limiting air conditioning, and encouraging public transport. Australia faces ripple effects because it imports most refined products from Asian hubs and, with China and South Korea limiting exports, it faces shortages and panic buying of gasoline.
Scarcity depends on geographic location.
“At the moment, the risk of running out largely depends on where you are in the world. Countries particularly dependent on the Gulf for oil and refined products – especially in Asia – are the first to suffer. This group includes South Korea, India, Malaysia, and Singapore. Stocks can cushion the blow to some extent, but on average they cover only about one month of demand.”
The shift from geographic scarcity to scarcity based on purchasing power.
“If the Strait of Hormuz remained closed for a prolonged period, it will not necessarily be the first affected who suffer the most. Over time, flows will reorganize, turning oil into a global liquid market – although perhaps 10 million barrels per day less. At that point, the determining factor of scarcity will no longer be where you are, but how much you can pay.”
The temptation of governments and the risk of distortions.
“Protecting consumers also represents a strong temptation: protests, like those that broke out in Ireland, show that rising fuel prices quickly become a political issue. But where the chosen tool is subsidies or tax cuts, it simply means that prices must rise even more to globally align supply and demand.”
Possible oversizing and demand destruction.
“Oil prices tend to overshoot on the upside because it takes time for people to adapt and find alternatives, such as building more renewables. This also means that the longer fuel remains very expensive, the greater the likelihood that some demand will never return. If the world runs short of oil long enough, it will eventually find it has too much.”
The need for difficult choices.
“A small consolation, however, for governments that meanwhile must make difficult decisions. Governments, even in the richest countries, may have to intervene to ensure that strategic users get what they need, such as the NHS in the United Kingdom.”
(Excerpt from the newsletter by Giuseppe Liturri)
