Unless some sort of a miracle happens, the world is facing a severe energy supply crunch in the months ahead. Since the war with Iran began, we have been able to function normally because we had huge inventory buffers that we could rely on. But now those inventory buffers are nearly gone, the Iranians have been attacking commercial vessels in the Strait of Hormuz, the Houthis are preventing Saudi tankers from getting through the Bab el-Mandeb Strait, and the Ukrainains have been relentlessly attacking Russian refineries. As a result, we are potentially facing a very difficult winter.
Most people do not understand how dire things have become because they are still operating as if there was no energy crisis at all.
The reason they have been able to do that is because we had extensive inventory stockpiles, but now those stockpiles are “largely depleted”…
At the start of the war in late February, countries relied on strategic oil reserves to mitigate the worst impacts of an energy supply crunch. Those stockpiles are now largely depleted, stripping the market of its key shock-absorbing cushion.
At this moment, the world is running an oil deficit.
But we can only do that for so long.
Once the stockpiles get to zero, oil prices will go “a lot higher”, and we are being warned that the clock is ticking…
“Our view, at a high level, is that we are in a crisis,” said Merritt Point’s Baird. “One that we have prepared for with very large inventory buffers, but the clock is ticking, and the challenges introduced this week with the potential disruption of Bab el-Mandeb just pull that much harder on the finite buffer.”
In addition to blocking Saudi vessels from traveling through the Bab el-Mandeb Strait, the Houthis are also hitting Saudi oil facilities…
Ship traffic through Bab el-Mandeb fell on Sunday after Yemeni Houthis attacked Saudi oil installations along the Red Sea coast, while transit through the Strait of Hormuz stayed low over the weekend, shipping data from Kpler showed on Monday.
Eleven commodity vessels passed through the Bab el-Mandeb strait on Sunday, the lowest level in months, the data showed.
We aren’t hearing about this a lot in the western media, but serious damage is being done by the Houthis.
In fact, Aramco’s Jizan oil refinery continues to burn two days after it was originally struck by ballistic missiles…
A 77 kilometer smoke trail indicates that the damage that has been done to that facility is quite extensive.
On Monday, the Houthis struck again.
This time is was Aramco’s Abqaiq oil processing facility…
Meanwhile there are emerging Monday reports that Saudi Aramco’s Abqaiq oil processing facility in the kingdom’s eastern province is on fire after probable drone and/or missile strikes by the Houthis, or from Iran-aligned Iraqi militias.
Newsquawk reports based on emerging Iranian state media that “Hours ago, the huge Abqaiq oil facility in eastern Saudi Arabia, one of the world’s most important oil processing centers, was set on fire in drone and missile attacks, reports Tasnim citing sources and images.”
The damage that the Houthis are causing could take months or even years to fully repair.
So even if the Strait of Hormuz and the Bab el-Mandeb Strait both suddenly opened, there won’t be as much Saudi oil flowing out of the region for an extended period of time.
Meanwhile, gas stations in Russia are actually rationing gasoline as a result of Ukraine’s unprecedented drone attacks on Russian refineries…
Ukraine’s Volodymyr Zelensky began intensifying drone attacks on Russian oil refineries in mid-June as part of a campaign to raise the war’s stakes for ordinary Russians more than four years after Putin’s full-scale invasion of his country.
Thanks to more than a month of attacks on refineries, fuel depots, and warehouses hundreds of miles behind the front line—including in Moscow—Russia is facing a fuel crisis the likes of which have not been seen since Putin’s rise to power more than 25 years ago, NBC News reported.
Gas stations in many regions have taken the unprecedented move of introducing rationing schemes and restrictions, and social media has been flooded with videos of long lines and frustrated drivers.
Russia normally exports a tremendous amount of oil.
But now they are being forced to purchase gasoline from India.
If we keep running down our inventory buffers, soon we will start witnessing rationing all over the globe.
Of course supplies of natural gas are getting really tight as well.
Gas storage facilities all over Europe should be nearly full right now in preparation for winter, but instead they are currently sitting at about half that level…
Supplies have been run down because of the war in Iran and the closure of the Strait of Hormuz, with up to a fifth of the world’s supply disrupted.
Currently, across Europe, gas storage facilities are around half full.
This is “an historically low level at this time of the year”, according to energy consultancy Wood Mackenzie.
Unless things change, this is going to be a long, cold winter in Europe this year.
The situation is even worse in the United Kingdom.
At this point, the UK currently has “less than a week’s worth of gas reserves”…
The National Energy System Operator (Neso) said the curbs would take effect from Friday, as it faces questions over how close Britain came to blackouts during a heatwave in June.
Official data show the UK currently has less than a week’s worth of gas reserves. European nations typically hold several weeks’ worth of supply, though stocks on the Continent have also been run down.
Mr O’Shea, the chief executive of Centrica, which owns British Gas, said: “European gas storage levels are low. UK gas storage levels are incredibly low … If it’s not a warm winter, then there’ll be problems, and the problems will be associated with having less gas in storage.”
If the war in the Middle East does not get resolved, I have no idea what everyone is going to do.
Of course I am fully convinced that the war in the Middle East is not going to end any time soon.
So I would make preparations for a very difficult winter.
As Chris Martenson often reminds us, energy is the foundation of all economic activity, and it appears that the world simply won’t have enough energy to function normally this upcoming winter.
Michael’s new book entitled “10 Prophetic Events That Are Coming Next” is available in paperback and for the Kindle on Amazon.com, and you can subscribe to his Substack newsletter at michaeltsnyder.substack.com.
About the Author: Michael Snyder’s new book entitled “10 Prophetic Events That Are Coming Next” is available in paperback and for the Kindle on Amazon.com. He has also written nine other books that are available on Amazon.com including “Chaos”, “End Times”, “7 Year Apocalypse”, “Lost Prophecies Of The Future Of America”, “The Beginning Of The End”, and “Living A Life That Really Matters”. When you purchase any of Michael’s books you help to support the work that he is doing. You can also get his articles by email as soon as he publishes them by subscribing to his Substack newsletter. Michael has published thousands of articles on The Economic Collapse Blog, End Of The American Dream and The Most Important News, and he always freely and happily allows others to republish those articles on their own websites. These are such troubled times, and people need hope. John 3:16 tells us about the hope that God has given us through Jesus Christ: “For God so loved the world, that he gave his only begotten Son, that whosoever believeth in him should not perish, but have everlasting life.” If you have not already done so, we strongly urge you to invite Jesus Christ to be your Lord and Savior today.
