Oil Pricing Is Going Crazy || Peter Zeihan

Global oil pricing is currently dictated by a severe breakdown in the security environment rather than traditional production costs. While the baseline price for Persian Gulf crude sits around $105 per barrel, hidden surcharges for transport and insurance have surged due to geopolitical instability. Russia’s "shadow fleet" must now bypass pipelines for lengthy maritime routes around Africa and Southeast Asia, while Iranian threats in the Persian Gulf force regional producers to utilize "dark" sea-to-sea transfers. These complications add $25 to $40 per barrel in costs that are not reflected in daily market metrics but are paid by importers like China and India. Conversely, North American producers experience divergent outcomes: West Texas crude profits from minimal transport risks, while Western Canadian Select remains undervalued due to its limited, land-locked infrastructure. Without political resolution, these widening price gaps threaten to cause outright breaks in global supply lines by year-end.