Don Struyven says global average crude freight is up $20 per barrel, with three quarters tied to rerouting supply, risk premiums and tied-up tankers. He notes Americas producers near refiners get cheaper crude, while distant Asian refiners pay more and ultimately pass costs to consumers.

The apparent stability in major oil benchmarks like Brent and WTI is misleading. These serve the Atlantic basin, while the core of the supply shock is in the Middle East. Asian benchmarks like Dubai and Oman are trading at significantly higher levels, revealing the true market tightness that headline prices conceal.

While nominal Brent oil at $100 per barrel is historically manageable in real terms, adding transportation costs lifts total delivered energy to $130-$140 per barrel. At that threshold, higher costs risk denting consumer demand and stalling positive emerging market growth forecast revisions.

While headline Brent crude prices appear benign in real terms, all-in delivery and transport costs have climbed to $130-$140 per barrel. This effective price level matches previous conflict thresholds where energy costs begin to actively drag on broader macroeconomic growth.

The market underestimates the lag in restarting the oil supply chain. Restoring production from shut-in wells and normalizing tanker traffic is a complex process that will take months. This 'flywheel' effect necessitates higher prices in the short term to induce demand destruction, regardless of immediate geopolitical news.

The global energy crisis is misunderstood. There is ample crude oil; the critical shortage is in refining capacity, especially for medium-sour crude needed for diesel. This means prices for gasoline and diesel can skyrocket due to refinery constraints, even while crude oil prices remain stable.

Media focuses on crude benchmarks like Brent, but the real market stress appears in refined products like diesel and jet fuel. These prices reflect refinery disruptions and consumer demand directly, and can reach unprecedented levels even if crude oil itself has not.

Focusing on crude's rise to $100/barrel misses the real story. Prices for refined products consumed by industries and travelers, such as diesel and jet fuel, have nearly tripled. This massive divergence reveals that the true economic pain is concentrated downstream from the oil well.

The headline crude oil price is misleading. The real economic impact is felt through refined products like diesel, which are trading at much higher equivalent prices ($160/barrel equivalent). This indicates the bottleneck is in refining capacity, not just crude supply, directly impacting businesses and consumers.