Global Demand Destruction: Subsidies, Empty Gas Stations, Rationing, Flight Cancelations, Export Limits, Price Controls

In the past two weeks we have discussed demand destruction as a result of soaring oil prices (here and here), and we are increasingly seeing anecdotal evidence of just that (here is a table from Goldman we showed previously, laying out where demand destruction is most acute). We start, as always, with Asia which has emerged as ground zero of the global energy crisis – as a reminder last week we first presented a map by JPMorgan’s resident commodity expert who how the shockwave from the Iran war spreads across the world, hitting Asia first, then Africa and Europe, before settling on the US, but mostly California. According to UBS, a shortage of jet fuel in Asia and very high prices for what is available are now leading to greater flight cancellations. European jet fuel trades around $1713/tonne, up 114% since the war began. Singapore fuel is up around 140%. Both Vietnam Airlines and Air New Zealand have had to cancel flights due to limited fuel supply. Let’s go down the list. 1. Panic buying prompts PM to reassure Australians over fuel supply (bbc) Australia will halve its fuel excise for three months from Wednesday after prices soared to a record last week as the impact of the Iran […]

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