Ras Tanura is not just “another refinery.”
It is one of the most important oil export arteries on the planet.
Saudi Arabia doesn’t just produce oil.
It anchors global supply.
So, if that flow is disrupted — even temporarily — markets reprice fast. Not just the oil, but insurance also goes up.
Most People Don’t Understand Oil
They think oil is a commodity — it's really not.
Oil is the foundation.
It feeds:
- Transportation
- Food production
- Manufacturing
- Aviation
- Plastics
- Global trade
You disrupt oil, you disrupt everything downstream.
Even a temporary outage creates uncertainty.
And uncertainty as you all know by now creates premium.
Premium shows up in:
- Higher crude prices
- Higher shipping insurance
- Higher freight costs
- Higher risk spreads
And once oil starts moving aggressively, inflation expectations move with it.
Oil feeds directly into CPI.
You don’t need an economist to tell you that.
You just need to fill your tank.
Here's what I think will happen, if crude spikes hard enough which seems quite possible right now:
- Inflation will resurge for sure.
- More printing. (not just oil, but because of the war as well)
- Bond yields will react.
- Liquidity will tighten.
And when liquidity tightens, markets don’t stay calm.
They unwind.
Slow at first.
Then fast.
This Is Not Just “Middle East Drama”
The Strait of Hormuz moves roughly 20% of the world’s oil.
Saudi processing capacity matters because it stabilizes global supply expectations.
Meaning not just the oil but a lot of the things you use on a day to day might go up slightly depending on what country you're in.
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