Fox Host Offers Grim Outlook On Oil Supply Disruption: ‘That’s The Price of Everything’

Fox Business host Dagen McDowell sounded the warning bells on The Big Money Show on Friday about the potential for long-lasting market disruptions over the oil supply crisis caused by the U.S. attack on Iran.

Co-host Taylor Riggs kicked off the discussion, citing the recent GDP revisions for the fourth quarter of last year, “Quickly, Brian, let’s talk about GDP growth that was basically cut in half for the preliminary estimates. A lot of people are now looking at just 2% GDP growth this year. That’s like on trend. I wanted three, four, five percent. You know, like trends, you know with personal income and spending accounting for inflation, real consumption just rose about a modest one-tenth of one percent.” Riggs added:

And finally, the interesting thing about the University of Michigan survey, Brian, is half of it was taken before the war and then the other half was taken after February 28th and obviously the signs were very different.

I think coming into February 28th, half the respondents said that things are really starting to pick up and look good and then all of the survey participants taken after February 28th had started to notice a lot more anxiety and deterioration particularly around their ideas of inflation. So with energy prices, tighter financial conditions with rising bond yields, private sector uncertainty, now the Jolts numbers look good but that’s you know something else, you know my worry is sort of taking out the big positive tailwinds that we had talked about.

“Dagen, is your glass more half full or half empty today in how things are going in Iran, and particularly as it relates to the Strait and all of the energy conversation we’re having?’ followed up Brian Brenberg.

McDowell replied, “I’m eating doughnuts out of anxiety and not drinking any liquids. So that would be half empty. I have no glass in front of me. But to Taylor’s point, we have slow growth and inflation that is still a concern from the numbers we got on the economy.” She continued:

They are backward-looking. They’re from late last year and from January. Nevertheless, that’s the backdrop of where we are. And you can’t argue that the administration didn’t plan for the Strait of Hormuz. But what they are doing raises questions. And I mentioned this the other day.

If you go back to the beginning of the Iraq war, ever since the U.S. invasion of Iraq, the presence there, the inflation-adjusted price of oil has been elevated compared to a longer period. And so this potentially, even if it is resolved, it elevates crude prices. So that’s the price of everything, even more than anticipated. Right now, in order to make sure that the world is properly supplied with oil because 15 to 20 million barrels a day aren’t passing as easily through the Strait of Hormuz.

As I’ve pointed out, there is oil going through the pipeline in Saudi Arabia, through the pipeline in the United Arab Emirates. At Khargh Island off Iran, the tankers are still being loaded. But the Treasury Department is allowing 124 million barrels of Russian oil that’s already on the water to essentially unload. So those sanctions have been waived for a period of 30 days. There are other things that are going to happen, but a 30-day waiver allows countries to snap up these sanctioned Russian barrels of oil.

That, the higher price and the ability and ease to sell that oil, it feeds the Putin beast, it just does. Russia also makes the very drones that Iran used to make, and I just raised the issue: is the threat of Iran going to be fully eradicated? Will the Strait of Hormuz no longer be a hot spot in the decades ahead, because that will add a premium to the price of crude oil in perpetuity? Regard: like we could pump a lot more oil here but are we? Because I just raised that issue because you’re not seeing signs of it.

Watch the clip above via Fox Business.

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